Web3 and DeFi deals experienced a considerable ascent in Q4 of 2021 with a deal value of circa $2.3 million across 37 deals.
The industry has kept its position as the largest recipient of ETI capital in 2022 with $874 million invested across 24 deals.
The Emerging Tech Indicator (ETI) delivers a quarterly in-depth report of the disruptive technologies and start-ups at the seed and early stages receiving investment from the top investors and venture capital firms.
The report focuses on a smaller sample of companies, giving a unique perspective of the technology trends and future promising companies.
Web3 refers broadly to the emerging industry for decentralised software protocols and blockchain based products and services, with DeFi embracing the emerging class of financially focused products within it.
Additionally, Web3 is the next stage in the development of the world wide web and the subsequent iteration of the current version of the internet we are all using, Web2.
Due to rising regulatory risks, with the Security and Exchange Commission (the SEC) taking a more active role in investigating exchanges such as the recently launched Coinbase investigation, there has been growing pressure within the industry.
Yet, this has not deterred top investors from remaining highly active in the space, with Web3 and DeFi, remaining at the top of investors’ interests.
A16Z, one of the biggest US venture capital firms has announced plans to invest several billion dollars into the Web3 and DeFi space in the months to come.
Lightspark, a startup seeking to improve the Bitcoin infrastructure software on the lightning network, has been the largest investment in Q2 of 2022 with a $175 million Series A round.
Certik, which provides blockchain software auditing and on-chain security monitoring secured $148 million in its Series B3 round.
Magic Eden, the third largest Web2 and DeFi deal, is a non-fungible token (NFT) related startup that provides an NFT marketplace and has raised $130 million in Series A funding.
These Emerging Tech Indicator (ETI) startups have growing support towards the NFT ecosystem, including creating proprietary NFTs (OnChain Studios, $26 million Series A), platforms for others to build NFTs (Tally Labs, $12 million seed), tools that enable group buying NFTs (PartyBid, $16 million early- stage-, and NFT portfolio management tools (NFT Bank, $12 million Series A).
The number of opportunities within the Web3 ecosystem is rapidly expanding and looks very encouraging, despite one some have perceived to be a regressive investment ecosystem of the last couple months.