Despite Slow Q2, VC Dollars Are Coming Back to Crypto

Venture capital firms Multicoin Capital and Lightspeed are funneling more money into blockchain projects and crypto startups


Blockworks exclusive art by axel rangel


key takeaways

  • Multicoin Capital announced it has secured $430 million for crypto startups
  • Venture capital firm Lightspeed partners with Faction to invest in early-stage blockchain infrastructure projects

Open investment projects dropped by 24.2% from April to May this year, and 28% from the same month last year, a Dove Metrics report shows. But despite bear market conditions, venture capitalists do not seem to be holding back anymore.

Crypto investment firm Multicoin Capital, which has backed multiple Web3 and decentralized finance projects — including Ethereum, FTX and Dune Analytics — announced today that it will be funneling an additional $430 million into crypto startups.

The Texas-based company closed a $100 million fund in May last year and was focused on investing in projects building on the Solana blockchain. This most recent third round of funding was announced soon after Multicoin led data DAO Delphia’s $60 million Series A last week and a decentralized mapping network Hivemapper’s $18 million Series A in April.

Multicoin is currently focused on investing in the NFT industry, infrastructure, issuance tools and exchanges, Tushar Jain, managing partner at Multicoin Capital, told Blockworks.

“Our valuation for any project comes down to three major variables that we care about: The first is market size, the second is margins or value capture, and the third is execution risk,” Jain said.

Traditional investment firms are also looking to build their crypto portfolios. 

Lightspeed, a multi-stage venture capital firm in the enterprise, consumer and health sectors, said it will invest in early-stage blockchain infrastructure projects in collaboration with early-stage blockchain venture fund Faction. co-founder Sam Harrison and Banafsheh Fathieh, who was previously the head of investments at Prosus Ventures, currently lead the fund.

The firm raised a combined total of $7.1 billion dollars across four funds, including three US-based funds and its newest focused on India and Southeast Asia. 

“Lightspeed has been investing in blockchain for over 8 years. We see this as a computing paradigm shift that is bigger than the ebb and flow of the short-term price of bitcoin,” a Lightspeed spokesperson told Blockworks.

“We are doubling down, specifically in infrastructure, DeFi and emerging use cases.”

Despite the blockchain gaming space attracting criticism for being another profit machine for gaming companies, as Bloomberg wrote, a significant amount of money continues to pour into the industry. 

Hong Kong-based Australian game software company Animoca Brands announced an additional $75.3 million in funding today. This money is the second part of a $360 million Series C the company raised in January, led by investors from Liberty City Ventures. 

Crypto fund and incubation lab Protagonist also launched its debut $100 million fund to support early-stage protocol development, with a specific focus on gaming, infrastructure and emerging blockchains markets, George Bousis, the co-founder of Protagonist, told Blockworks.

“In bear markets and out of financial crises, you see some of the best businesses and returns. We think this is where the real builders and investors are going to thrive in the markets that we have identified,” Bousis said.

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