Crypto VCs made $2.6B worth of deals in the first quarter of 2023

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Valuation trends in the report are mixed, with seed rounds up 33.3% and late-stage rounds up 209.2% compared with 2022; however, early-stage rounds are down 16.7%.

While the crypto space suffers through a bear market, venture capital (VC) firms are still making deals in 2023, demonstrating that the space is alive and well despite the “crypto winter.”

According to PitchBook’s Crypto Report for the first quarter of 2023, crypto companies raised $2.6 billion across 353 investment rounds. While it shows the space is still active, it’s evident that it’s not as strong as it used to be.

The report revealed an 11% decrease in quarter-on-quarter deal value and a 12.2% decrease in total deals. In addition, the quarter also recorded the lowest amount of capital invested in the space since 2020.

Venture capital activity across various quarters. Source: PitchBook 

The report also noted that valuation trends have been mixed. Seed rounds are up 33.3%, and late-stage rounds are up 209.2% for the quarter compared with the entire year of 2022. However, early-stage rounds are down by 16.7%. 

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While the report recognizes that the decline may continue, it also identified some positive outlooks for the space. The data shows layer-2 scaling solutions can continue their momentum from 2022. The report cited Blockstream raising $125 million to finance a Bitcoin (BTC) mining infrastructure and Scroll — a firm building a zero-knowledge Ethereum Virtual Machine scaling solution — raising $50 million in a late-stage VC round.

Besides scaling solutions, custody solution providers Ledger and Taurus received sizable investments in 2023. On March 30, Ledger raised $109 million as demand for self-custody soared. Meanwhile, Taurus raised $65 million in a Series B on Feb. 14.

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