A total of $7.1 billion was invested in Web3 coins in 2022. Investors showed interest in NFTs in the first half of the year, and in gaming, metaverse and infrastructure in the second and third quarters. He then switched to Artificial Intelligence (AI) in Q4. In 2022, Paradigm became the most active investor in Web3, followed by Andreessen Horowitz. So what opportunities await us for 2023?
Despite the bear market, Web3 coins managed to raise funds
Firms invested more in Web3 coins than in 2021 last year, despite bear market pressures. cryptocoin.comAs you follow, 2022 saw interest in Web3 investment split into four key areas. There is significant interest in this area from commercial banks such as Morgan Stanley and Goldman Sachs. Then they invest in successful Web3 coins, with global VCs joining the game.
Meanwhile, Tier 1 digital asset institutions like Binance Labs, Coinbase Ventures, and Kraken Ventures, among other trends, are raising funds. Finally, comes the network-specific funds, as indicated in the screenshot below.
But despite the crypto downturn and overall bearish trend, 348 startups raised a total of $7.16 billion last year. According to Metaverse Post, that was more than $4.5 billion from the previous year. The report split the amounts under Gaming, Metaverse, Social Networks, Infrastructure, Artificial Reality and Virtual Reality (AR and VR) and Artificial Intelligence (AI). With increasing innovation and demand, various categories made the headlines throughout 2022.
The second quarter of 2022 saw metaverse and gaming projects attract millions of dollars’ worth of funding. According to the report, venture capitalists continued their allocations to projects won by playing, with ‘particular attention to blockchain casinos, collectibles, loot boxes and football-themed games’. But Q4 saw some deviations.
Change in investment strategy in Web3 coins
In the last quarter, investors turned their attention to augmented, virtual and mixed reality initiatives. Artificial intelligence, such as the AI chatbot ChatGPT, also attracted great attention from VC firms. For example, InworldAI raised $50 million in a Series A round. Then came SEED with $41 million. SingularityDAO raised $25 million and MarqVision raised nearly $20 million in a Series A game. Adding further support, the spokesperson says:
VCs are unlikely to lose interest in Artificial Intelligence (AI) in 2023. Also, more AI startups will likely receive funding.
We move on to another change in the narrative about investments. Given the increasing hacking and other illegal operations, investors are focusing on the importance of security on the Web3. This leads to more investment in infrastructure initiatives. Here is a list of the best projects that have received the most funding under the aforementioned categories.
List of top projects by category
Gaming giant Epic Games has snatched $2 billion in investment money from Sony and LEGO owner KIRKBI by switching to individual assets in categories. The creator of Fortnite has used the funds to ‘advance his vision of the metaverse and support its continued growth’. At the time of writing, the company is valued at $31.50 billion.
Moving on to Yuga Labs, creator of the Bored Ape Yacht Club (BAYC). The company raised more than $400 million to build the Otherside metaverse. Recently Yuga Labs released the ‘First Trip’ of the Otherside experience and made fun of BAYC fans with its upcoming Second Trip.
Another big name that managed to make it to the top three was Venture Capital Animoca Brands, a metaverse-focused startup. Next was Immutable, a Sydney-based Layer 2 NFT firm. The report also focuses on investors with plenty of pockets—four investors who have spent more than $7 billion in total.
Biggest investors investing in Web3 coins
At the top of the list is Paradigm, a San Francisco-based crypto-focused investment firm. The famous firm Coinbase spent $2.50 billion in 2022 as it supported 31 projects such as Uniswap, Magic Eden and Optimism.
Later, Andreessen Horowitz, or a16z, was the second most active investor after Paradigm with $2.20 billion. Meanwhile, HiveMind Capital Partners has invested $1.5 billion in Web3 coins. Binance Labs, on the other hand, ranked 4th with a $1 billion spending frenzy in 2022.
Investing in this group may sound reassuring and rewarding, but failures are an integral part of it. The first exchange will be Singapore-based cryptocurrency hedge fund Three Arrows Capital, also known as 3AC. Millions of dollars evaporated after the crash. In general, investors need to be extremely careful when dealing with technologies that continue to evolve and mature over the years.
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