IN BRIEF
- This report delves into the AI, crypto, and web3 sectors, shedding light on the prominent industries and key players for the quarter.
- During Q2 2023, a total of 78 web3 projects secured investments amounting to $367,955,000.
- Meanwhile, 21 NFT projects successfully garnered funding, amassing a total of $72,816,000.
Welcome to the Metaverse Post’s highly anticipated Fundraising Report for the dynamic second quarter of 2023. Within these pages, we delve into the most significant trends in the realms of AI, crypto, and the thrilling web3 sectors, unveiling the standout industries and formidable players who shaped this quarter.
Web3 Trends Unveiled – Dominant Projects by Categories
In the exhilarating landscape of the second quarter of 2023, an impressive total of $367,955,000 flowed into the coffers of 78 web3 projects. Leading the charge is the captivating world of gaming, as it commands a remarkable 31.24% share of the entire web3 fundraising for this quarter. Following closely behind are the innovative realms of social networking and payment startups, securing substantial amounts of $29 million and $25,750,000, respectively.
Gaming
In the dynamic realm of gaming, a total of 20 innovative startups managed to secure an impressive $115,100,100 in funding. Undoubtedly, this resounding success reaffirms the gaming category as the undisputed crown jewel within the web3 sector. However, it’s worth highlighting that investor enthusiasm in this sector peaked during the first quarter of this year, with 23 gaming startups raising a staggering $201,720,473.
Throughout the entire year of 2022, the gaming category saw a remarkable infusion of $4,487.3 million. Venture Capital firms displayed keen interest in a spectrum of gaming niches, including play-to-earn projects, blockchain casinos, collectibles, loot boxes, and football-themed games.
One notable standout, the web3 gaming studio Pomerium, secured a substantial $20 million in a Strategic round, spearheaded by an undisclosed angel investor. This capital injection will be pivotal in bolstering the studio’s portfolio of blockchain-based games.
Karate Combat, on the other hand, demonstrated its prowess by raising a formidable $18 million, in a round led by Bitkraft Ventures, with participation from Delphi Digital, The Operating Group, Hashkey, Alpha Wave Global, Lattice, M13, Santiago Santos, and RooxieXBT. These funds are earmarked for the continued development of their full-contact martial arts league, powered by Unreal Engine’s cutting-edge XR technology.
Another notable success story was RACA, a web3 gaming ecosystem, which secured a substantial $16 million in a Strategic round led by DWF Labs. In a unique twist, DWF Labs also acquired an undisclosed amount of RACA tokens as part of the deal. This financial infusion is slated to further expand the web3 gaming ecosystem.
HyperPlay, a web3 game launcher and game store aggregator, achieved a commendable milestone with $12 million raised in a Series A round, co-led by Griffin Gaming Partners and Bitkraft Ventures. Additional prominent investors include ConsenSys, Ethereal Ventures, Delphi, Game7, Mirana Ventures, and Monoceros Ventures. The incoming capital will be instrumental in enhancing their flagship game launcher and broadening their international footprint.
The popular open-world RPG adventure game Illuvium also garnered an impressive $10 million in a Strategic round, led by Framework Ventures. This injection of funds will expedite the expansion of their groundbreaking AAA gaming universe and provide crucial support to remote contributors.
Social Network
In the ever-evolving landscape of social networking, Q2 2023 witnessed a notable surge, with the category ranking as the second most influential. Although only three startups managed to secure funding within this niche, the collective investment amounted to a remarkable $29 million.
One standout, the social primitive protocol Lens, secured a substantial $15 million from a group of distinguished angel investors, including Haydan Adams of Uniswap, Alex Atallah of OpenSea, Bali Srinivasan, Sandeep Nailwal of Polygon, Kevin Owocki of Bitcoin, Hitren Shah of Nire, Sébastien Borget of The Sandbox, Maggie Love of SheFi, and pplplsr of Shibuya. These funds are earmarked to accelerate the adoption of the next generation of the internet, powered by human connection – the people-powered social layer.
Information protocol RSS3 also made a significant mark by raising $10 million in a private token sale to DWF Labs. The startup has recently unveiled RSS3 AIOP, an artificial intelligence training environment designed to provide web3 information.
Notably, PoP Planet, a private domain social management tool tailored for web3 creators, secured $4 million in a round led by Foresight Ventures. These funds will be channeled towards supporting iteration and product development, with plans to sponsor creator incentives upon launch.
Payment
In the realm of digital payments, the payment category emerged as the third most prominent player in the second quarter of 2023. A total of seven startups garnered a collective funding of $25,750,000, signaling significant investor interest in this space.
Azteco, a provider of small Bitcoin vouchers for everyday use, demonstrated its potential by securing $6 million in a Seed round, with Jack Dorsey leading the charge. The round also saw participation from Lightning Ventures, Hivemind Ventures, Ride Wave Ventures, Aleka Capital, Visary Capital, Gaingels, David Van Der Weele, and Sunil Rajaraman. These funds will be instrumental in the development of their product and expansion into Latin America and Europe.
Poko, a fiat payment provider tailored for the web3 era, successfully raised $4.5 million in a Seed round, with support from Y Combinator, NAZCA, and Global Founders Capital, among others. The startup currently focuses on direct checkout and on-ramp aggregation.
BoomFi, a crypto payments platform, also made waves by securing $3.8 million in a Seed round led by White Star Capital. These funds will facilitate the launch of strategic partnerships, product development, and the expansion of its merchant base within the web3 sector.
Insurance
Meanwhile, in the realm of insurance, Meanwhile Insurance Bitcoin successfully secured $19 million across two Seed rounds. The first round was co-led by ChatGPT CEO Sam Altman and former Stripe executive Lachy Groom, while the second round was spearheaded by Gradient Ventures, with Standard Crypto (the former name of Meanwhile Insurance Bitcoin) also participating. These substantial funds will be directed towards expanding the development team in support of their innovative new product.
Data
The data sector also made its presence felt in Q2 of 2023, with four promising startups collectively raising $13.5 million.
Subgraph and the blockchain indexing platform Satsuma joined forces to secure $5 million in a Seed round, with leadership from Initialized Capital and Archetype. OpenSea, Y Combinator, Homebrew, and South Park Commons also contributed to this successful round.
Digital assets data and insights provider PYOR attained $4 million in a Seed round, with Castle Island Ventures taking the lead. The round witnessed the participation of Hash3, Antler, Future Perfect Venture, Force Ventures, CoinSwitch Ventures, Coinbase Ventures, and Balaji Srinivasan. These funds will play a pivotal role in expanding the startup’s team.
Funding
Delphi Labs, the web3 accelerator arm of Delphi Digital, secured a notable sum of $13.5 million from P2P Validator and Jump Crypto. Delphi Labs is poised to harness these funds to develop an accelerator dedicated to nurturing the growth of teams embarking on web3 projects, underscoring the continued innovation within this space.
Metaverse
Three promising metaverse startups secured an impressive $11 million in funding during the second quarter of this year. It’s important to highlight that the allure of metaverse projects seems to have waned among investors. During Q2, these companies received a relatively modest sum of $13 million, compared to the staggering $450 million raised in 2022 when the metaverse industry was riding high. Since the second half of 2022, we’ve witnessed a gradual decline in investor enthusiasm for this sector.
One standout, AI-driven social metaverse company Social Future, successfully raised $6 million from an array of esteemed investors, including SNZ, Everest Venture Group, Folius Ventures, Y2Z Ventures, Mask Network, Tess Ventures, Stratified Capital, and Mindfulness Capital. Notably, several strategic funds supported by prominent public companies also joined the funding round. Social Future is actively working on “MAY” – “Meet Another You,” a groundbreaking tool designed to facilitate immersive social experiences through personalized avatars.
In addition, CEBG Game, a developer specializing in anime MOBA and battle royale games, secured $3 million in investment from key players such as Hashkey Capital, GSR Ventures, KuCoin Ventures, A&T Capital, YouBi Capital, SNZ Holding, BitFury Capital, and Kernel Ventures.
Singapore-based metaverse innovator, GoodGang Labs, also successfully garnered $2 million in funding from Kakao Investment. This dynamic startup is devoted to building an avant-garde communication platform and pioneering technology for avatars.
Media
Blockworks, a prominent web3-focused media company, demonstrated its appeal by securing a substantial $12 million in a round led by 10T Holdings. Notably, Framework Ventures and Santiago R. Santos are among the influential backers who recognized the company’s potential. The infusion of capital will be instrumental in propelling research and data offerings and facilitating global expansion.
Education
TinyTap, an alternative education system firmly rooted in the web3 ecosystem, achieved a notable milestone by raising $8.5 million in funding. A consortium of distinguished investors, including Sequoia China, Shima Capital, Polygon, Liberty City Ventures, Kingsway Capital, and GameFi Ventures, recognized the transformative potential of TinyTap. The platform, essentially “owned” by teachers and the web3 community, is committed to utilizing the investment to expand its team and further develop its innovative educational product.
Wallet
In the realm of digital wallet solutions, Tangem AG made significant strides by securing a substantial $8 million investment from Shima Capital. The company is poised to diversify its product offerings, reinforcing its position as a leader in the hardware wallet space.
Marketing
The marketing sector also experienced a resurgence of investor interest in Q2 2023, with two startups successfully attracting investments. In total, the industry amassed $8 million in funding.
Absolute Labs, a wallet relationship management platform, achieved remarkable success by raising $8 million in a Seed round. This accomplishment was made possible through the support of renowned investors such as Aglaé Ventures, Near Foundation, Alpha Praetorian Capital, TLF Ventures, MoonPay, Plassa Capital, Punja Global Ventures, Samsung Next, W3i, and Animoca Brands’ Sparkle Ventures. The company is making significant strides in developing web3-focused marketing software.
Betting
FARE Protocol, a pioneering player in the betting industry, secured $6.2 million in a Seed round led by Goat Capital and C Squared Ventures. An impressive roster of investors, including 6th Man Ventures, Arrington Capital, Eniac Ventures, Spark Digital Capital, Morningstar Ventures, Quantstamp, and DWeb3, recognized the potential of FARE Protocol’s ecosystem, built on probability smart contracts driven by transparent on-chain events based on probability variables.
AI
The web3 AI landscape witnessed a resurgence in Q2 2023, with three innovative startups collectively raising $11.3 million. While this figure may appear relatively modest compared to the boom in artificial intelligence tools and apps, it’s important to note that most AI companies, like OpenAI, do not fall under the web3 category.
Kaito, an AI-powered search engine specializing in crypto, achieved a notable milestone by securing $5.5 million in a Series A round led by Superscrypt and Spartan. The platform is poised to make significant strides in the intersection of AI and cryptocurrency.
AiONE, a pioneering platform fusing AI and blockchain technologies, achieved a significant feat by raising $3 million in a private token sale. Furthermore, AiONE’s token has been successfully launched on the BNB Smart Chain network.
Orbofi AI, an innovative generative AI engine catering to web3, games, apps, media, and online communities, successfully secured $2.8 million in private and public token sales. The round was co-led by influential backers including Cogitent Ventures, OIG Capital, CSP DAO, Zephyrus Capital, and Halvings Capital. Orbofi AI is committed to utilizing this capital infusion to bolster its engineering and expansion teams, further accelerating its work in the web3 space. Additionally, the company is gearing up for the launch of a highly anticipated mobile app slated for release in the third quarter of 2023.
Development
In a noteworthy shift from the first quarter of 2023, where the development category was conspicuously absent, Q2 saw five dynamic web3 development startups successfully secure a collective sum of $19.9 million.
Informal Systems, an emerging player in the development space, achieved a remarkable feat by raising $5.3 million in a round led by CCMC Global. Nascent, DWeb3 Capital, and Maven11 also played pivotal roles in this accomplishment, and the startup is poised to leverage this funding to expand its security auditing division.
Startale Labs, a forward-thinking web3 infrastructure developer, secured $3.5 million in a Seed round, with the notable participation of tech giant Sony. A notable development in this partnership is the appointment of Jun Watanabe, President and Representative Director of Sony Network Communications Inc., as a director of Startale Labs, signifying a strong and mutually beneficial collaboration.
Sort, a dynamic web3 UI components development platform, successfully secured $3.5 million in a Seed round, co-led by Lemniscap and The General Partnership. This investment will be instrumental in expanding the platform’s product offerings and strengthening its core team.
Research
In the second quarter of 2023, the research sector witnessed the support of venture capital firms and angel investors, with a total of $11.1 million raised by three innovative startups.
ResearchHub, a trailblazing tokenized social network designed to empower scientists to monetize their research, secured a remarkable $5 million in a Series A round led by Joseph Jacks of OSS Capital. Distinguished participants in this round included Boost VC, Bob Young of RedHat, Guillermo Rauch of Vercel, Amjad Masad of Replit, and Garry Tan of Y Combinator. This funding will enable ResearchHub to expand its platform, develop new tools and features, and engage a broader international audience of scientists.
LabDAO, an ambitious online life science research collective, successfully secured $3.6 million in a round co-led by Village Global and inflection.xyz. The participation of investors such as North Island Ventures, Seed Club Ventures, ID Theory, Road Capital, Curve Labs, gmjp.lol, Molecule,
Gnosis DAO, The LAO, Orange DAO, Beaker DAO, Spaceship DAO, and Balaji Srinivasan underscores the collective’s mission to decentralize drug discovery.
Security
CAT Labs, a pioneering cybersecurity startup with a focus on combating crypto-enabled crime, secured $4.3 million in a Pre-seed round led by Castle Island Ventures, Brevan Howard Digital, CMT Digital, and RW3 Ventures. Noteworthy participation from Newark Venture Partners, Hash3, Borderless Capital, Cryptoverse Ventures, and Outshine Ventures further underlines the importance of CAT Labs’ mission.
Communication
The communication sector saw significant growth in Q2, with three startups collectively securing $9.8 million in funding.
Yoz Labs, a dynamic web3 notification system, successfully raised $3.5 million in a round led by Electric Capital. The support of key investors such as Collab+Currency, Dapper Labs, Coinbase Ventures, Form Capital, North Island, Mike Krieger, and Naval Ravikant underscores Yoz Labs’ commitment to advancing scalable messaging rails that facilitate immediate on-chain notifications to users.
APIs
Airstack, an innovative AI-powered web3 developer platform, secured $4 million in an extended Pre-seed round led by Superscrypt. This dynamic platform provides fast and easy access to on-chain data across projects and blockchains, with a recent update to its Jam social app.
Bandwidth
Syntropy, a pioneering distributed routing protocol for the internet, achieved a significant milestone by securing $4 million in a Post-seed round. The support of key investors such as Alpha Transform Group, Alphemy Capital, Denali Digital, Saxon Ventures, and FirstBlock Capital will enable Syntropy to accelerate its growth and innovation.
Accounting
Entendre Finance, a provider of accounting and bookkeeping solutions tailored for businesses in the web3 landscape, successfully raised $4 million in a Seed round led by Basis Set. Participation from Valhalla, Caffeinated, Moonpay, Alumni, MDig, and Alpine further validates Entendre’s mission to assist businesses in achieving robust financial systems and internal controls. CEO and founder Kareem Khattab emphasized the importance of the next 12-24 months for blockchain companies and adopters, highlighting the need for better systems and controls.
Trends in NFT
In the second quarter of 2023, the NFT sector showcased remarkable growth, with 21 NFT projects collectively raising an impressive $72,816,000. This underscores the continued vibrancy and innovation in the NFT space.
Marketplace
AlienSwap, the NFT marketplace and aggregator, has raised an impressive $12 million in a Strategic round. This funding endeavor was co-led by the influential NEXT Leader Capital and C² Ventures, with additional participation from industry giants like OKX Ventures, Araceae Capital, BIP32 Venture, Hyper10n Capital, Eureka Trading, Mission Street Ventures, Phyrex, and existing Seed round investors. With these substantial resources at their disposal, AlienSwap is poised to expand its engineering team and develop innovative NFT liquidity tools and trading products. Furthermore, they have exciting plans to bolster their investment in NFT infrastructure.
Trading
Tabi, a dynamic multi-chain NFT publishing and trading platform, has secured an impressive $10 million in an angel funding round. The backing came from some notable players, including Animoca Brands, Draper Dragon, Hashkey Capital, Infinity Crypto Ventures, Youbi Capital, Bo Feng of Dragonfly Capital, Riyad AD of Saudi Arabia, and Suji Yan of Mask Network. Tabi intends to direct these funds toward the development of its gaming ecosystem and the construction of an on-chain identity protocol.
Collectibles
NFT project Pudgy Penguins has garnered a significant boost with $9 million in a Seed round, which was led by 1kx. This round saw the support of Big Brain Holdings, Kronos Research, Old Fashion Research, CRIT Ventures, and LayerZero Labs’ founders. Pudgy Penguins will deploy this funding to scale its intellectual property and expand its dedicated team.
Ecosapiens, the pioneering perpetual carbon-capture NFT company, has also made waves by raising $3.5 million in a Seed round, with Collab + Currency taking the lead. Notable investors in this round include crypto influencer gmoney, Shan Aggrawal of Coinbase Ventures, and Ryan Carson of Moonbirds. The capital infusion will primarily be utilized to develop the Ecopsapiens marketplace and explore innovative minting strategies while forging new brand partnerships.
Intelligence
Mnemonic, the NFT analytics platform, has reinforced its position with a $4 million injection in a Seed round, led by Kinetic. Sound Ventures, Tribe Capital, Coinbase, IntoTheBlock, and People.ai lent their support. The startup’s focus with this funding will be on developing its B2B API platform, with a dedicated emphasis on providing comprehensive NFT analytics.
Gaming
Gameta, the NFT entertainment and gaming network, is taking the industry by storm after securing a substantial $5 million in a Seed round. A notable roster of participants includes Binance Labs, Huobi Ventures, Arcane Capital, Ceras Ventures, StartVC, Gate.io Labs, W3Coins, Redline DAO, Definancex, Rana Capital, and Infinity Labs. These funds will fuel the acceleration of Gameta’s game ecosystem, NFT system, and tokens as they strive to attract a colossal 20 million users.
Music
Swedish music platform Anotherblock has hit a high note with $4,347,000 in funding, thanks to a round led by Inventure, Maex Ament of Centrifuge.io, and Fedrik Haha of Dune.xyz. Stable Node, DannyBoyStyles, and several existing investors added their support to the symphony. Anotherblock’s mission is to make music rights accessible and democratic.
Minting
Vibe, the NFT-to-product platform, has generated a significant buzz with a $4 million injection in a Seed round. Notable investors in this endeavor include Alchemy, Algaé Ventures, and P Nation. Vibe empowers users to transform non-fungible tokens into versatile apps and products.
Intellectual Property
Artifact Labs, dedicated to preserving cultural and historical events on the blockchain, has secured $3.25 million in funding, with Blue Pool Capital leading the way. Animoca Brands’ Animoca Ventures has also thrown its weight behind the venture. Artifact Labs intends to harness this financial boost to expand its team, with a focus on recruiting top-tier developers.
Noted Investors
In an illustrious show of confidence, ChatGPT CEO Sam Altman and former Stripe executive Lachy Groom co-led the initial Seed round of Meanwhile Insurance Bitcoin, amassing a substantial $19 million in two phases. This reaffirms Altman’s track record, having previously invested in Context, the developer of “the first social feed for Ethereum,” and TipTop, a consumer finance solution for an emerging web. Lachy Groom’s impressive portfolio features notables such as Context and Entrepreneur First, a platform enabling users to build startups from the ground up.
The second Seed round of Meanwhile Insurance Bitcoin was aptly spearheaded by Gradient Ventures. The Mountain View-based venture fund boasts an impressive portfolio, including Spectral and BlockJoy.
Bitkraft Ventures played a pivotal role as the lead investor in Karate Combat, a venture that collectively raised a staggering $18 million. Bitkraft’s global investment platform places emphasis on web3, gaming, and immersive technology and features a portfolio that includes heavyweights like Epic Games, Avalon, Discord, Immutable, and other industry luminaries.
DWF Labs took the reins in leading the Strategic round for the web3 gaming ecosystem RACA, which received a commendable $16 million. DWF Labs, a digital asset market maker and multi-stage web3 investment firm, has a diverse presence with offices in Switzerland, Singapore, the British Virgin Islands, the United Arab Emirates, South Korea, and Hong Kong. Their impressive portfolio comprises startups such as Yield Guild Games, Fetch-AI, and The Open Network (TON).
Fails
The second quarter of 2023 marked a relatively calmer period compared to the first, but the crypto community faced its share of challenges, primarily due to security breaches:
- In April, a breach in one of MetaMask’s third-party providers exposed personal information for potentially 7,000 users who had submitted customer service tickets between August 1, 2021, and February 10, 2023.
- In June, the Twitter account of OpenAI’s CTO, Mira Murati, was reportedly hacked, with the attacker promoting a cryptocurrency called “$OPENAI” on the Chief Technology Officer’s profile.
- Subsequently, influencer Bitboy Crypto’s Twitter account was hacked to promote anti-SEC scam tokens, resulting in a significant loss of approximately $1 million.
- On June 15, stablecoin USDT temporarily depegged from the US dollar, dropping to a local low of $0.997 before later stabilizing at $1 on different platforms.
Conclusion
The second quarter of 2023 has continued to feel the impact of the ongoing bear market, with VC firms exercising caution and investing a maximum of $19 million in a project. The gaming category remains a focal point of interest for VCs, with a total of 20 startups securing a significant sum of $115,100,100 in funding. Following closely are three social network projects, which amassed $29 million, and seven payment startups, raising a total of $25,750,000. Even though the NFT sector is not as red-hot as it was in 2022, 21 startups in this space managed to secure an impressive $72,816,000 in funding.