The crypto industry’s fundraising efforts have taken a major hit due to the relentless crypto winter. Q3 was no exception.
The latest data shows that both the total amount of funding and the number of deals have reached new record lows during this period, reaching levels not seen since the fourth quarter of 2020. Quarterly figures fell below $2.1 billion for a total of 297 deals, representing a record 36.% decline in both categories compared to the previous quarter.
DeFi among well-funded sectors
According to Messari’s report, decentralized finance (DeFi) took the lead in terms of the number of deals funded, with 67 in total, while on-chain infrastructure secured the largest share of financing, at 18% of the total. The gaming sector also posted a strong quarter, garnering nearly $250 million in investments.
During the third quarter, DeFi emerged as the sector with the highest number of funded projects, with 68 deals. Investment within this sector was particularly concentrated, with the stock exchange category accounting for 38% of all capital invested, across 33 deals. In total, DeFi projects have collectively raised $210 million, with an average deal size of $3 million.
Binance Labs actively participated in the DeFi sector, closing seven deals during the quarter. This included strategic investments of $10 million each in Helio Protocol, a liquid betting platform on BNB Chain, and Radiant Capital, a money market built on LayerZero. The largest DeFi deal of the quarter was a $16.5 million Series A funding round for Brine, an order book DEX built on Starkware.
Furthermore, three of the four largest investors in DeFi, based on deal volume, were deeply connected to the ecosystem. Binance Labs, the Base Ecosystem Fund and Polygon together accounted for 16 deals during the period.
Binance Labs – By far the most active investor
Despite being embroiled in legal battles, Binance Labs emerged as the most active investor for the third quarter.
Binance’s venture capital and incubator arm has 23 deals, surpassing the next closest investor, Robot Ventures, with more than double the number of investments. Throughout 2023, Binance Labs maintained an active investment strategy, focusing on the DeFi and gaming sectors, in addition to showing interest in projects developing zero-knowledge and privacy technology.
Interestingly, twelve of these deals involved projects that participated in the accelerator program. Excluding these accelerator-related investments, the company’s remaining eleven investments would still tie the company with Robot Ventures in terms of deal activity in the third quarter.