Casey Wagner

<div id="highlights-block_62b9fde9a550e" class="highlights">
 <ul>
 <li>Crypto companies and startups have received a total of $3.657 billion in venture funding so far in June, down from $4.219 billion in May and $6.829 billion in April</li>
 <li>One company had to lower its valuation 30% to close its latest round, its CEO said</li>
 </ul>
 
</div>



As cryptocurrency markets struggle to come back from their recent <a href="https://cms.blockworks.co/bitcoin-investment-products-endured-453m-of-outflows-last-week/" target="_blank" rel="noreferrer noopener">sell-off</a>, the days of record-setting venture capital funding in the space may be behind us. 



Crypto companies and startups have received a total of $3.657 billion in venture funding so far in June, down from May’s total of $4.219 billion, according to <a href="https://www.dovemetrics.com/" target="_blank" rel="noreferrer noopener">data</a> from Dove Metrics. In April, funding totaled $6.829 billion. 



“With increasing interest rates, investors are going to ask for a higher premium, and that means valuations are potentially going to drop, it means that you&#8217;re not going to see in a multi-$100 million rounds at multibillion-dollar valuations with a 20 or 30x multiple,” Rodrigo Vicuna, chief financial officer of Prime Trust, said. “We&#8217;re going to revert back to the mean or below and balance out, it&#8217;s all about balance and it&#8217;s all about cyclicality.” 



Jenna Pilgrim, CEO of Rite Network, told Blockworks her company lowered its valuation 30% to close its most recent fundraising round.&nbsp;



“What we&#8217;re seeing is investors, as each market drawdown happens, they tie themselves a lot tighter to their thesis,” Pilgrim said. “An investor in previous market conditions would have not necessarily invested outside of their thesis, but would have been more flexible, they are less so now.”&nbsp;



Saurabh Sharma, head of investments at Jump Crypto, added that investors may be taking more care in evaluating projects, but there will continue to be funding in the space.&nbsp;



“Very strong, quality entrepreneurs and conviction projects are always in demand,” Sharma said. “In general, I’d think the levels would be down, but I think from our perspective, one of the biggest focuses is going to be finding those very long-standing, vision entrepreneurs with high conviction projects.”&nbsp;



Prime Trust, a digital-assets custody and infrastructure startup, appealed to investors taking the long view, Vicuna said. The company just closed its $107 million Series B funding round earlier this month with plans to expand its product suite and portfolio.&nbsp;



Vicuna said the team at Prime Trust, which started raising its second round this year, was “starting to see the overall declining market,” adding “the writing was a little bit on the wall.”



“That really led us to look at what we need to weather a multi-year cycle and be scalable and efficient,” Vicuna said.&nbsp;



Prime Trust has about 700 customers, including exchanges, wallet providers, broker dealers and banks, and provides crypto-focused institutional products that eventually reach retail consumers.



Investors in the Series B round include payment processing firm FIS, Fin Capital, Kraken Ventures, Commerce Ventures and others.&nbsp;



“I think investors have the right sentiment of when things are hot, you grow, and when things are cool, you build,” Vicuna said. “Some might think of that as a tired adage, I think that it&#8217;s just good business because you have to prepare for not where the market is, but where the market can be.”



Tushar Jain, managing partner at Multicoin Capital, said it’s probably too early to say how current market conditions will affect funding in the long run.&nbsp;



“Valuations in private markets haven&#8217;t fully adjusted yet, because a lot of teams and projects raised money in the last 12 months or so, and so they&#8217;re flush with cash, they have more than enough runway,” Jain said. “A lot of these companies are in a very good spot, so that actually reduces the chances that we see a repricing of those deals, because they just don&#8217;t need to go to market and they don&#8217;t need to get repriced.”&nbsp;



Projects looking to launch in the bear market might tell a different story, Jain said.&nbsp;



“Then you can see public markets pricing those assets,” he added. “I do think launching in a bear market is better for projects than launching in a bull market, because it&#8217;s just less noise and only the people who actually care about your projects are there.”



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VC Funding Slows Again in June, but Experts Say Worthwhile Projects Will Get Money

Ben Strack

<div id="highlights-block_62a07d4575c0b" class="highlights">
 <ul>
 <li>Delphia plans to use consumer spending insights, employment patterns and public opinion data to deliver algorithmic models previously exclusive to hedge funds</li>
 <li>Data DAOs will become forces to be reckoned with in capital markets, Multicoin Capital managing partner says</li>
 </ul>
 
</div>



A Toronto-based algo-advisor has raised $60 million in a Series A round led by Multicoin Capital to launch a native rewards token, increase the number of ways users can contribute data, and expand its headcount. Delphia CEO Andrew Peek said the company offers retail investors an alternative to passive robo-advisors and direct stock-picking through a platform like Robinhood.&nbsp;&nbsp;



Delphia analyzes the personal data shared by its members to make investment decisions and offers long-only actively managed investment strategies with zero management fees and $25 investment minimums. It also has a hedge fund for accredited investors that runs a long-short market neutral strategy of roughly 2,500 US equities.



The investment platform intends to utilize consumer spending insights, employment patterns and public opinion data from social media to deliver algorithmic models previously exclusive to hedge funds. The company will allow its investors in the coming weeks to begin contributing their own data in return for a native token that can be traded or redeemed for membership benefits.



Multicoin Capital Managing Partner Tushar Jain called Delphia a “first mover” in a trend of data DAOs seeking to utilize user-owned data to benefit those users.&nbsp;



“Not only are they getting a data dividend, but they’re able to invest in a strategy that will generate alpha off the data they contribute,” Multicoin Capital Managing Partner Tushar Jain said of Delphia users.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“If my data helped predict something about asset prices, that can go make me money for my investment account. And I think that is extremely powerful.”</blockquote>



Tokens are useful as a coordination mechanism to get people to do things together, Jain told Blockworks. While play-to-earn game Axie Infitity and Web3 app STEPN pay people tokens to do things, Jain said Delphia is another take on that thesis.



Jain also noted the power of large data sets. He previously co-founded a business called ePatientFinder, which aggregated patients’ medical record data to help find clinical trial and treatment opportunities.&nbsp;&nbsp;&nbsp;



“One person’s data is not that powerful. 10,000 people’s data is not that valuable. Getting into the hundreds of thousands to a million people range, that data set starts to become substantially more valuable,” he said. “I thought Delphia, being a global data DAO, was extremely powerful when you combine those forces together.”&nbsp;



Delphia has now raised a total of $80 million. Other participants in the latest round were Ribbit Capital, FTX Ventures, Valor Equity Partners, FJ Labs, Lattice Ventures, Cumberland and crypto entrepreneur and investor Thomas Bailey.



“We’re most excited about rewarding our members with a true data dividend for helping us build the world’s largest user-contributed proprietary data set,” Peek said in a statement. “We expect this token to help us improve the stock selection algorithm for all the participants in our ecosystem.”&nbsp;



<h3 class="wp-block-heading">Multicoin remains active amid drawdown</h3>



Multicoin’s investment in Delphia follows its backing of Hivemapper, a decentralized mapping network with a crypto-integrated dashcam that raised $18 million in its Series A round in April.



Jain said the current drawdown in crypto markets has not slowed venture deals in the space, noting that Multicoin remains actively looking for attractive deals.&nbsp;



JPMorgan analysts <a href="https://cms.blockworks.co/crypto-leapfrogs-real-estate-jpmorgan-says/" target="_blank" rel="noreferrer noopener">wrote in a May 25 report</a> that year-to-date crypto venture capital funding stood at $25 billion. Even after the collapse of Terra’s stablecoin UST last month, which rattled crypto markets, “there is little evidence of VC funding drying up,” they added.



In addition to data DAOs, Jain said his firm is focused on investing in the creator monetization segment as Web3 transforms how artists, musicians, writers and other creators have a relationship with fans.



“We are looking for new, weird things,” he said. “We really don’t like investing in the ‘n-th’ iteration of something,” Jain said. “That’s not where we think the highest returns lie.”



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Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



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The Lightspeed newsletter is all things Solana, in your inbox, every day. <a href="https://blockworks.co/newsletter/lightspeed">Subscribe to daily Solana news</a> from Jack Kubinec and Jeff Albus.