Cryptocurrency Companies Continue To Attract Billions in VC Funding

Twitter icon  •  Published 5 months ago  •  Hassan Maishera

The cryptocurrency market has grown to become a $3 trillion industry, and the private investments entering into the sector continue to increase.

Crypto Companies Raised Over $6 Billion In Q3 Alone

The past few years have been exceptional for the cryptocurrency space. It is now the fastest-growing financial market in the world and reached the $3 trillion mark earlier this year. In the past, crypto companies mostly raised funds via the public sale of their tokens and other similar means.

However, the trend has changed over the past two years as private investors are now recognizing the massive potential in the cryptocurrency space. Venture capitalists, hedge funds and other institutional investors are pouring in billions of dollars into cryptocurrency companies.

According to the recent report from Blockdata, VC funding for blockchain companies between July and September 2021 hit an all-time high of $6.5 billion in 339 rounds. The record was a massive improvement from the $3.83 billion and $5.131 billion raised in Q1 and Q2, respectively. This implies that cryptocurrency companies raised over $15 billion in the first three quarters of the year.

It is worthy to note that the amount raised in Q3 2021 alone was double the total amount raised throughout all of 2020 when VC funds invested $3.8 billion in crypto companies. Some of the biggest deals so far this year include;

FTX: $900 million

Led by 29-year-old billionaire Sam Bankman-Fried, FTX has been one of the leading crypto exchanges this year. The company closed a whopping $900 million Series B funding round in July, taking its valuation to over $18 billion. The crypto exchange added another $600 million in the fourth quarter of the year and is now worth over $25 billion.

Some of the VC funds that invested in FTX include Sequoia Capital, Paradigm and Coinbase Ventures. The $900 million raised by FTX remains the biggest round in the industry’s history. FTX said it would use the funds for various mergers and acquisitions as it expands its services.

Celsius Network: $750 Million

Cryptocurrency lender Celsius Network raised $750 million just last week, the second-biggest round in the history of the cryptocurrency market. The company is now valued at over $3 billion. The cryptocurrency lender closed a $400 million Series B in October led by growth equity firm WestCap, and Caisse de dépôt et placement du Québec (CDPQ). The company at the time stressed that the round would boost its credibility with regulators.

Celsius was able to raise these funds despite its recent troubles with financial regulators in some states across the United States.

Sorare: $680 million

Sorare, a fast-growing fantasy soccer game based on Ethereum NFT cards, raised $680 million in the third quarter of the year, bringing its valuation to $4.3 billion. The Series B round was led by Japanese investment conglomerate SoftBank. Sorare is a leader in the NFT space and has over 200 licensed soccer clubs, including FC Barcelona, Juventus FC, Paris Saint-Germain FC, and Liverpool FC, as well as players representing the United States’ Major League Soccer Players Association. VC firms are betting big on the NFT space, and Sorare is one of the leaders in this area.

Circle: $440 million

Stablecoin issuer Circle was one of the biggest winners in the second quarter of the year after raising $440 million. Some of the notable investors included Fidelity Management and Research Company, Marshall Wace, Digital Currency Group, FTX, and Breyer Capital. The funding round raised its valuation to $3 billion.

Circle has attracted investment because its platform supported more than 100 million transactions by more than 10 million retail customers and over 1,000 businesses. The company also became Visa’s V -0.7% V +0.2% partner to help businesses on the network settle transactions in USDC. Since 2020, USDC has supported over $615 billion in transactions, a growth of more than 28,000% in the past 12 months.

Genesis Digital Assets: $431 million

Another huge funding round in the cryptocurrency space was by Genesis Digital Assets. The firm raised $431 million, led by Paradigm. Other notable private investors include New York Digital Investment Group (NYDIG) and FTX. The $431 million was raised after the company completed another round of $125 million in the third quarter of 2021.

Genesis Digital will use the investment to expand its services. It expects to reach a data center capacity of 1.4 gigawatts over the next two years.

BlockFi: $350 million

This was one of the biggest funding rounds in the first quarter of the year. The cryptocurrency lender raised $350 million from notable investors such as Bain Capital Ventures, partners of DST Global, Pomp Investments, Tiger Global and Susquehanna Government Products. The funding round brought its valuation to $3 billion from $435 million.

BlockFi is one of the leading crypto lending firms, and its products span multiple categories, including crypto-collateralized loans and interest-bearing accounts through which investors can earn interest on their crypto holdings. The company is considering an IPO, but it hasn’t set an exact date or provided further details on it.

Solana Labs: $314 million

Solana remains one of the best cryptocurrency projects so far in 2021. Solana Labs, the foundation behind the blockchain project, raised over $300 million from private investors earlier this year. Some of the notable investors include Andreessen Horowitz, Polychain Capital, Alameda Research, Blockchange Ventures, and CMS Holdings.

The Solana team is using the funds to deliver both scalability and speed to the blockchain. Over the past few years, Solana has facilitated more than 19 billion on-chain transitions and hosts a range of decentralized products, including Serum, a decentralized exchange.

Fireblocks: $310 million

Fireblocks, a New York-based company that provides digital asset custody, transfer, and settlement infrastructure for clients, including banks and exchanges, raised $310 million in the second quarter of the year. The funding round was led by Sequoia Capital, Stripes, Spark Capital, Coatue, DRW VC and SCB 10X and brought the firm’s valuation to $2 billion at the time.

More Investment Will Enter The Crypto Market

The cryptocurrency market is just starting to grow, and institutional investors are entering the space. Over the next few months and years, the amount of private investment into the industry could grow exponentially.

Author

Hassan Maishera

Hassan is a Nigeria-based financial content creator that has invested in many different blockchain projects, including Bitcoin, Ether, Stellar Lumens, Cardano, VeChain and Solana. He currently works as a financial markets and cryptocurrency writer and has contributed to a large number of the leading FX, stock and cryptocurrency blogs in the world.

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