Execs remain positive on long-term prospects amid VC funding downturn
As crypto prices remain at lower levels, venture capital (VC) funding also recorded one of its worst quarters since 2021. Despite this, executives in the space remain optimistic about the industry’s long-term potential.
Crypto data platform RootData highlighted that the second quarter of 2023 delivered one of the worst performances in terms of crypto fundraising. Compared with the first quarter of 2022, where $12.62 billion were raised across 559 funding rounds, Q1 2023 saw around $2.1 billion across 292 rounds — an 83% decrease in VC investments flowing into the space.
Despite the flow of venture capital funds slowing down, professionals working in the space believe there’s still a strong ongoing belief that crypto has potential in the long term.
Gvantsa Chkuaseli, the head of structuring and fundraising at Web3 accelerator Outlier Ventures, told Cointelegraph in a statement that despite the downturn in Q4 2022, there’s also been an uptick in activity. According to Chkuaseli, this suggests investors strongly believe in blockchain’s long-term potential.
“We can see with our own portfolio, such as Mawari’s recent $6.5 million seed round co-led by Blockchange Ventures and Decasonic, and Zinc’s $5 million Series A, that there is interest despite the challenging conditions,” Chkuaseli explained.
Chkuaseli added that some investors appear undeterred by the recent downturn and continue to back early-stage companies within the sector. “We still believe, though, there are reasons to be optimistic,” Chkuaseli said. The executive also noted the massive interest in startups focused on artificial intelligence (AI), highlighting that fetch.ai received $40 million in funding from DWF Labs earlier this year.
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