Web3 Projects Attract Bulk of Venture Funding

Web3 funding is growing, as funds are redirected from crypto investments.
  • Web3 leads in earmarked funds for new projects.
  • Huobi Global set aside $1B for Web3 early investments.

Web3 projects are partially joined to the world of crypto assets, and may be affected by the bear market. However, some of the Web3 startups have managed to attract as much as $8B in funding. 

Web3 is also holding the biggest share when it comes to funding blockchain-related startups, games and NFT collections. The products in that space are diverse, as the concept itself is hard to define. But Web3 includes the building of end-products for digital consumers, including games and NFT ownership, or decentralized versions of Web2 services. 

https://twitter.com/BOSSincrypto/status/1539227253816573953

Web3 has the advantage of self-funding through crypto platforms. However, some of the projects reach out directly to funds. Others reach out to organizations like Animoca Brands, which is one of the biggest donors and curators in the space. Binance is also among early investors and has announced special programs for games. 

The Web3 funding extends previous rounds directed to blockchain and crypto, but with a special bent on decentralized identities and ownership. 

Recently, Sequoia Capital also earmarked $2B to invest in early-stage Web3 projects. While the exact products emerging from that space are unknown, the time frame of investments is set for 5 to 10 years. Web3 funding may also benefit from the current crash of crypto trading and DeFi, as funds are redirected to the next new thing. Less venture firms are supporting purely blockchain and crypto projects, especially after problems with DeFi hubs like Terra and Celsius.

The Web3 trend was noted back in March by Crunchbase. Some of the funding rounds go to formerly large crypto startups which now have a special focus on building the decentralized Internet. Those projects include Ethereum-based startup ConsenSys, as well as Polygon, one of the most widely used L2 solutions.                       

Cash-rich organizations that managed well during the bull market for cryptocurrencies are now showing readiness to reinvest some of the funds. Huobi has earmarked more than $1B for building. 

The funding trickles down, with special vehicles in the 100-150M range, while separate projects and games secure between $2-3M during early financing rounds.

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