Funding had one of its best weeks of the past couple of months, with funding increasing 81% from last week to $574M. This increase was almost entirely due to an outstanding week from infrastructure – which accounted for $482M of funding and consisted of 8 deals. The largest of these deals was a raise for Mysten Lab’s Sui Blockchain, which we delve deeper into in the Deal of the Week section. This week’s infrastructure funding was a massive increase from last week, which only had $21M of funding. Other sectors lagged – with each receiving $25M or less in funding. Web3 had the sharpest drop, decreasing from $66M to $9M.
Two crypto funds were raised this week – Bloccelerate’s second fund and MetaWeb Ventures first fund. Bloccelerate’s fund is looking to raise $100M and has currently raised $20M of its target. MetaWeb Ventures, which plans to invest in early-stage Web3 companies, raised $30M from a number of LPs, including the NEAR Foundation, Sequoia Capital, Dragonfly Capital, and GSR Markets, among others.
The majority of deals remain in the early stages (Seed Round deals accounted for 38.9% of total deals). However, we have seen an uptick in later-stage deals: Series A accounted for 22.2% of deals, and Series B and Strategic deals accounted for 5.6% and 11.1%.
Deal of The Week
Mysten Labs, the company behind Sui, the high-powered proof-of-stake blockchain network, has raised $300 million in a Series B fundraise. The investment was led by FTX Ventures and other investors, including some of the most prestigious names in the industry, such as Jump Crypto, Binance Labs, a16z, and Coinbase Ventures, amongst others. The fundraising round values the company at more than $2 billion despite the network not launching on main-net yet. Mysten has stated the $300 million is earmarked for building out the network’s core infrastructure and accelerating the ecosystem’s adoption with a focus on the Asia-Pacific region.
Why Is This Deal of the Week?
The hefty fundraise displays the continued appetite for blockchain products in private markets. Mysten Labs’ latest fundraising rounds represent one of the year’s largest deals. The layer-1 network is unique in its horizontal scaling approach, allowing for instant finality and low fees. CEO of Mysten Labs, Evan Cheng, compares current blockchain infrastructure to the dial-up era of the internet and believes Sui will be the solution to scale with demand, incentivize growth, eliminate middlemen, and enable users across applications to seamlessly integrate with their favorite products.
Layer-1 networks were the hot investment in 2021, with tokens such as $SOL, $AVAX, $NEAR, and $BNB seeing huge run-ups, each making their claim to fame to be the network to dethrone Ethereum. Despite the crowded arena, it is interesting to see continued demand for layer-1 investments. Through 2022, investment narratives have shifted towards Ethereum layer-2 scaling solutions, such as Optimism and Arbitrum, as Ethereum’s highly anticipated shift to proof-of-stake is less than a week away. With a successful merge, Eth’s tokenomics will improve drastically, cementing it as the premier blockchain network. At a $2 billion valuation before a main-net launch, Mysten Labs and Sui have their work cut out for them.
Selected Deals
Omni, previously known as Steakwallet, is an infrastructure-based platform that aims to increase accessibility to Web3 technology. The platform intends to accomplish this by providing users with an easy-to-use noncustodial wallet. The company has secured $11M in funding at a $50M valuation through its seed round. The funding round included investor participation from Spartan Group, GSR Ventures, OP Crypto, Shima Capital, and others. Omni intends to use the capital raised to expand its service offerings and increase integration on scaling solutions.
HotStreak is a Web3-based platform aiming to combine decentralization and daily fantasy sports (DFS) contests. The platform’s SHARP protocol offers near-instant payouts and increased security compared to more traditional and popular sports betting platforms, which rely heavily on legacy payment systems. The company has secured $9M in funding through its Series A round led by Polychain Capital. HotStreak intends to use the capital raised to develop its protocol and platform further.
Fuel Labs is an infrastructure-based platform aiming to increase the speed of crypto transactions. The platform intends to accomplish this through its Fuel Virtual Machine, purpose-built coding language, and parallel transaction execution. The company has secured $80M in funding through its Series A round co-led by Blockchain Capital and Stratos Technologies. In addition, the funding round also included investor participation from Alameda Research, CoinFund, Bain Capital Crypto, and others.
MetaWeb Ventures is a venture capital firm and ecosystem fund for the Near Protocol. With the fund recently coming out of stealth mode, they have already participated in the funding of 30 startups. The company has raised $30M in funding with investor participation from Dragonfly Capital, Sequoia Capital, the Near Foundation, and others. MetaWeb Ventures intends to use the capital raised to fund early-stage gaming, decentralized autonomous organizations (DAOs), and decentralized finance (DeFi) based startups.
Hubble Protocol ($USDH) is a DeFi-based platform aiming to provide secure DeFi lending within the Solana ecosystem. The platform hopes to create and build a protocol equivalent to MakerDAO ($DAI), an Ethereum ($ETH) based DeFi protocol. The company has secured $5M in funding led by Multicoin Capital. Hubble intends to use the capital raised to develop its protocol further and hire Solana developers.
