Funding for crypto development teams at Aptos Labs and Mysten Labs drove DeFi and Web 3 deal-making in the third quarter of this year.
According to new research, Web3 and DeFi continue to top venture capital fundraising activity, even as deals decrease. The latest Emerging Tech Indicator report from Pitchbook indicated that investment in emerging technologies decreased for the third straight quarter in the three months to September 2022, with transaction values hitting $4.7 billion, down 32% from the spring's $6.9 billion.
Although there has been a drop in deal-making, and it has been a difficult year for crypto, Web3 and DeFi projects received the most funding in emerging tech, topping both finance and biotech. Investment in the industry was $879 million in the third quarter, the lowest reported level since the second quarter of the previous year.
However, $6.5 billion has been poured into the industry in the last year, considerably outpacing the second most-backed space of fintech, which has attracted $2.7 billion. The sector's standing was boosted further by the fact that blockchain startups Mysten Labs and Aptos Labs were involved in two of the quarter's largest acquisitions. With $300 million and $200 million in raises, they ranked second only to WeWork founder Adam Neumann's new rental startup Flow, which raised $350 million.
What is the future for DeFi Deals?
According to Pitchbook analysts, the recent failure of FTX will result in a decrease in early-stage financing for crypto businesses in the coming quarters.
"While ETI investors continue to invest in this sector, the recent bankruptcy of cryptocurrency trading platform FTX and industry-wide infection have had a detrimental impact on future levels of investment." Significant asset categories, including as healthtech, business SaaS, and AI, have seen fewer agreements supporting Web3 projects this year.
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