The first quarter of 2024 saw a significant increase in investment in Web3 firms, with a rise of over 55%, indicating a resurgence of venture capital (VC) interest in the crypto industry. According to a report by QuickNode and Artemis, there was also a 36% increase in the number of Web3 VC investment deals compared to the previous quarter.
The report highlighted that the majority of investment went towards artificial intelligence (AI) and gaming-related Web3 protocols. This data was further supported by a graph provided by QuickNode, showing the quarterly number of Web3 investment deals.
Furthermore, VC firm Paradigm demonstrated its interest in Web3 by leading a $225 million funding round for Monad Labs, a company developing a new layer-1 blockchain network to rival Solana. This funding round was announced on April 9th.
Two notable investment rounds during the quarter included a $42 million Series B round for Berachain and a $35 million pre-seed round for 0G Labs, a blockchain focused on data availability for AI protocols.
Seed round deals experienced the most significant growth, increasing by 53% compared to the previous quarter, indicating a heightened interest in early-stage investments. The report also noted that Series A and seed funding rounds nearly doubled their capital inflows, suggesting that VCs are once again willing to invest in Web3.
Leading up to the 2024 Bitcoin halving, several noteworthy investment deals were announced. Mezo, a Bitcoin layer-2 network, completed a $21 million Series A funding round led by Pantera Capital on April 9th. Mezo allows investors to earn yield based on the duration they hold their tokens, describing itself as a “Bitcoin Economic Layer.”
Additionally, reports emerged on April 3rd about Paradigm negotiating to raise up to $850 million for a new fund, potentially making it the largest raise in the crypto industry since May 2022 when Andreessen Horowitz raised a record-breaking $4.5 billion.
In related news, Binance Labs has shifted its investment focus to Bitcoin DeFi, aligning with the growing interest in decentralized finance within the crypto industry.