Another Day, Another $125 Million in Web3 Venture Funding

key takeaways

While capital investment into crypto has declined overall compared to last year’s record $32 billion, 2022’s half-yearly figures have blitzed all other previous years
The $125 million in commitments are slated for budding Web3 and crypto projects, adding to several similar industry investment

Early-stage crypto venture capital firm North Island Ventures will set aside $125 million for crypto and Web3 protocols despite market uncertainty and excess capital for budding projects.

North Island’s NIV Fund II will direct between $250,000 and $3 million for up to 40 early-stage projects, the firm said in a statement on Tuesday.

The firm’s latest fund succeeds its previous North Island Ventures Fund I which poured investments into blockchain development platform Axelar and crypto payments provider BCB Group, among others.

Total assets under management on the books for the two-year-old, New York-headquartered firm is clocking roughly $300 million, it said.

“We launched NIV in 2020 based on our belief that crypto is the next great enabling technology,” NIV’s co-founder Travis Scher said in the statement. “The industry has advanced tremendously since then.”

This year has seen a number of venture capital firms establish exorbitant funds, ranging in the hundreds of millions, in much the same way North Island has rationalized its capital allocations.

Echoing vogue investments of bygone eras, firms are now betting big on the next iteration of the internet.

Late last month, Seven Seven Six, a digital assets-focused venture capital firm led by Reddit’s co-founder, rolled out a $177 million fund targeting Web3 startups.

Early-stage investment firm Konvoy Ventures also unveiled a multimillion-dollar fund for budding gaming companies focused on a number of crypto verticals, including Web3, in July.

While retail and institutional investors continue cautiously in the aftermath of Terra’s collapse and bankrupt crypto lenders, capital remains available toward those building through a bear market — particularly when valuations have reached their lowest levels in years.

The largest deals so far this year have derived from VC raises. A $1.1 billion raise by Germany-based Trade Republic, a $550 million raise by US-based Fireblocks, a $400 million raise by Bahamas-based FTX and a $450 million raise by ConsenSys have stacked the numbers.

Recent research by “Big Four” accounting firm KPMG shows venture capital into crypto dropped to just over $14 billion for the first half of this year, lagging the rate of investment in 2021 which totalled $32.1 billion.

Still, overall investment in the space by mid-year remained well above all years prior to 2021, data shows.

Get the news in your inbox. Explore Blockworks newsletters:

The Breakdown: Decoding crypto and the markets. Daily.
Empire: Crypto news and analysis to start your day.
Forward Guidance: The intersection of crypto, macro and policy.
0xResearch: Alpha directly in your inbox.
Lightspeed: All things Solana.
The Drop: Apps, games, memes and more.
Supply Shock: Bitcoin, bitcoin, bitcoin.