From late 2021 to mid-2022, the money spigot for crypto projects was in full swing. Startups raised $10.7 billion in the first quarter of 2022 alone, according to crispy base. But that flow became a trickle in 2023, when cryptocurrency founders raised approximately $6.7 billion over four quarters.
A regulatory crackdown by the U.S. federal government, a cryptocurrency bear market, and a down year for large-scale venture capital contributed to an arid funding landscape, but the money spigot wasn't completely turned off. .
These are the most surprising fundraisers of 2023, from some of the largest on record to one of the most dubious.
The longest
As 2023 came to a close, Wormhole, a project that allows developers of separate blockchains to communicate with each other, announced one of the biggest increases of the year, according to Crunchbase Web3 Crawler.
Finalizing its separation from market maker and VC Jump Crypto, the team behind Wormhole saying which had raised $225 million at a valuation of $2.5 billion. Participants included venture capital stalwarts like Brevan Howard, Coinbase Ventures, and of course Jump Trading, of which Jump Crypto is an offshoot. In an interview with FortuneWormhole executives said the deal was exclusively for yet-to-be-launched tokens, rather than shares in the company.
This was the first confirmation that Wormhole, perhaps best known for a $320 million hack of its protocol in February 2022, plans to launch a token. Shortly after, LayerZero, a direct competitor and another cross-blockchain messaging protocol, Announced which would also launch its own token.
LayerZero also had Announced its own staggering rise from $120 million to $3 billion in early 2023. If in 2022, flashy startups like Yuga Labs and OpenSea secured hundreds of millions in capital, in 2023 some of the dullest back-end companies raised the largest amount of money.
the most dystopian
Infrastructure was arguably the crypto buzzword of the year, but there was still room for flashy, offbeat startups to make money, the most dystopian of which turned out to be Worldcoin, which wants to scan your eyeballs. to prove that you are human.
In May, Tools for Humanity, the developer of Worldcoin, Announced which had raised $115 million in a Series C funding round led by Blockchain Capital, with a16z crypto and Bain Capital as participants. Backed by Sam Altman, CEO of OpenAI, creator of ChatGPT, Worldcoin aims to solve the same problem Altman is arguably creating: a world overrun by AI.
The project was originally conceived as a form of universal basic income, but distributed as cryptocurrency, because as AI takes more and more jobs, we will continue to need money. In theory, each human being should receive an allocation of "Worldcoin" to buy food, pay our AI butlers, etc. But to distribute cryptocurrency, we need a way to distinguish between humans and robots. Enter the orb!
Now synonymous with Worldcoin, the metallic silver orb (to which Fortune subjected itself) scans a human's eyeballs and keeps a record of the iris scans. Despite this released its cryptocurrency in July, Tools for Humanity has, in the short term, positioned its technology as a form of login authentication, most recently integrating with Reddit, Telegram and Minecraft.
the most bittersweet
In November, Blockchain.com, which maintains a crypto wallet and operates an exchange, increase a generous $110 million in a Series E round led by Kingsway Capital. The only drawback? The money was raised at a valuation of less than $7 billion, less than half of what investors valued the signing in March 2022. (When it was reached by FortuneA spokesperson for Blockchain.com declined to comment on the valuation reported by Bloomberg.)
The bearish round was both encouraging (crypto winter is over!) and disappointing (a more than 50% cut in valuation, yes). And it wasn't the only company to see such a decline in 2023. Coatue Management reduced its stake in OpenSea to less than $1.4 billion, according to Information. Tiger Global also reduced its share of the NFT market by 94% and also reduced its investment in Yuga Labs, creator of Bored Ape Yacht Club, by 69%, for Bloomberg.
Perhaps Blockchain.com's most recent rise is a number. Cryptocurrency detractors may see it as further evidence of the industry's bubble bursting in 2023. Others may see it as a victory for cash-strapped founders.
The most unexpected
Cryptocurrencies are not AI, and eight-figure raises are atypical, especially for a company's first round, and especially during a cryptocurrency bear market.
So when Auradine announced it had raised $81 million with no product, no customers, and just one presentation, it was a bit surprising. Furthermore, when it revealed its capital injection, the founders did not want to describe exactly What was your product?
That's why Fortune excavated about how exactly this out-of-nowhere company, which finally revealed it was building a new Bitcoin mining chip, got such a big initial spike. The answer? Experienced (but not flashy) founders, focus on potentially superior hardware and technology beyond what's available in the US market.
the most incomplete
Cryptocurrencies are not cryptocurrencies without their (alleged) scammers. And perhaps one of the strangest fundraises of the year was a $10 million bet on a company called CryptoGPT, a mix of two different buzzwords that, when combined, form a Frankenstein of the tech hype.
In April, CryptoGPT announced a Series A, a round led by DWF Labs that valued the startup at $250 million. And what was CryptoGPT intended to do? In another rumor-laden description, their website said: โCryptoGPT is the ZK Layer-2 that lets you own the monetization of your AI data.โ Hey?
CryptoGPT has since been renamed LayerAI. Fortune reached out to both the startup and its sponsor, DWF Labs. A DWF partner said they have had no contact with LayerAI since April. And LayerAI staff never responded Fortunequestion about what exactly a company's word cloud does.
