The month of June closed out with a 29.73% decrease in venture capital investments, with just $779.32 million raised in 62 individual deals, according to data from the Cointelegraph Research Venture Capital Database. While the United States Federal Reserve halted interest rate hikes in June, the macroeconomic climate remains unchanged due to geopolitical uncertainties and continued efforts to tame inflation across the globe. As the data shows, investors remained cautious and in risk-off mode in June, with the growth trend of the previous three months coming to a halt.
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However, that is not necessarily a bearish signal, as the overall trend for 2023 is still upward. Plus, the recent batch of Bitcoin exchange-traded fund (ETF) applications from the likes of BlackRock, VanEck, WisdomTree and Fidelity as well as Ripple’s legal victory over the Securities and Exchange Commission have helped brighten the mood. The crypto market instantly reacted to those positive events, but VC investments are always a lagging indicator, as institutions tend to be more inert and cautious. It is also important to note that VC activity may be tempered by the uncertainty of overall global economic conditions.
Blockchain infrastructure still dominant
The Cointelegraph Research Venture Capital Database reveals that the breakdown of deals in June didn’t drastically change and that the investment focus of VCs remained relatively stable. Blockchain infrastructure still led the market with 20 individual deals and over $493 million in funding.
Decentralized finance (DeFi) won back some ground with 20 deals and over $144 million invested. Surprisingly, Web3 was less popular for venture capitalists in June, with about $107 million over 18 deals. Centralized finance (CeFi) and nonfungible tokens (NFTs) again closed out the list with about $32 million and $2 million of investment and one and three individual rounds, respectively.
The largest deal in June was Islamic Coin’s (ISLM) $200 million raise from Alpha Blue Ocean’s ABO Digital. The project aims to create a digital financial instrument for Muslims around the globe, and its total funding has surpassed $400 million. Far behind Islamic Coin was the $43 million Gensyn deal led by a16z Crypto with participation from CoinFund, Canonical Crypto and others. Gensyn is a blockchain-based artificial intelligence project connecting buyers and sellers of compute power.
Another entry on the list is Mythical Games, which raised $37 million in Series C deal led by Scytale Digital with participation from ARK Invest, Animoca Brands and others. The funds will be used to launch a new marketplace and pursue other revenue-generating initiatives. Bitpanda Pro, meanwhile, closed a Series A round for $33 million led by Peter Thiel’s Valar Ventures and rebranded to One Trading. The round will help expand its reach to professional traders and institutions throughout Europe.
While March, April and May saw VCs increase their capital inflows into the blockchain space, the trend was rejected in June, signaling that more uncertainty may lie ahead. However, slight deviations month-to-month are less important than the overall trend, which is steadily rising. With the spot ETF fillings and Ripple-SEC lawsuit yet to impact the crypto venture capital market, July and August are expected to offer indications of which will have greater weight — general macroeconomic conditions or crypto market hype events.
To keep on top of VC activity, follow the Cointelegraph Research VC Database, which is updated weekly and tracks over 6,000 deals from 2012 through the present day.