Author: Zen, PANews
The financing information of projects serves as an important signal for market development, reflecting not only the competitiveness of the projects themselves but also the flow and confidence of market funds, as well as indicating the direction and trends of innovation. PANews regularly launches the 'Financing Weekly' column every Monday morning, continuously recording the financing market information every week. As the year comes to an end, based on the financing information throughout the year, we review the overall performance of the primary market this year, providing reference for investors.
Overview of the Investment and Financing Market in 2024
According to incomplete statistics from PANews, there were a total of 1,259 disclosed investment and financing events in the primary market of the cryptocurrency and blockchain field in 2024, with a total funding scale exceeding $9.3 billion. In terms of the total number and scale of financing, this year's investment and financing market situation is basically comparable to that of 2023, which had 1,174 transactions completing $9.615 billion in financing. Compared to 1,660 investment and financing events in 2022, with a total funding exceeding $34.8 billion, the situation has stabilized more in recent years, with investment transactions becoming more cautious and rational.
It is worth mentioning that besides being close in total amount, the trends of 'total financing amount' and 'number of financings' this year and in 2023 have also fluctuated in a remarkably similar manner.
Firstly, the cryptocurrency investment and financing market had a strong start this year, peaking between March and May amidst rapid progress, with March's financing scale exceeding $1.03 billion, which is also the only month this year where the financing amount exceeded $1 billion. Close behind are April, May, and October, all of which had funding scales above $950 million.
Secondly, after a strong start, there was a lack of momentum in the middle, entering a low period from June to September. During this period, the number of disclosed financing events only broke a hundred in August, while the financing scales in July and September were both below $600 million.
Thirdly, there was a sudden surge after entering the fourth quarter, with 106 disclosed investment and financing events in October, raising over $957 million, marking the best monthly performance in the second half of this year. Although there was again a downturn in November, the primary market performance in December also had bright spots; as of December 22, the financing scale for that month had exceeded $818 million.
With the development of the industry, the narrative themes and categories of startups have become more diverse than ever. Based on market hotspots, PANews roughly categorizes projects into eight sectors: DeFi, Web3 Games, Infrastructure & Tools, AI, DePIN, Centralized Finance, Consumer, and Others, and has conducted statistics on the investment and financing situation of each sector.
As the most capital-favored sector for a long time, the number and amount of investment and financing transactions in infrastructure and tools are the highest across all sectors, with 381 transactions and $3.66 billion respectively; the second hottest sector this year is DeFi, with 296 transactions and $1.69 billion, both ranking second; centralized finance is the only sector, besides infrastructure and tools and DeFi, with a funding scale exceeding $1 billion, with an average financing amount also being the highest at $14.92 million; AI projects as an emerging category have grown rapidly this year, with nearly a hundred disclosed financing events, and a funding scale of around $600 million.
The specific statistical situation of each sector is detailed below.
Infrastructure & Tools
Among all the projects that completed financing this year, 30% belong to the infrastructure & tools sector, accounting for 39.46% of the total amount raised. This sector also disclosed the most large financing news, with events in the tens of millions of dollars and above accounting for 27.82%, including 6 events with a financing scale exceeding $100 million, and as many as 106 events in the tens of millions range.
The financing situation in the infrastructure & tools sector is generally comparable to the overall trend, with the most disclosures of 48 financing messages in February; the peak monthly financing occurred in March, exceeding $543 million.
In December, the Avalanche Foundation raised $250 million through a private token sale, marking the largest single financing of the year. This round of financing was led by Galaxy Digital, Dragonfly, and ParaFi Capital, with more than 40 companies participating in the investment, including SkyBridge and Morgan Creek Digital.
In addition, in October this year, payment company Stripe acquired the stablecoin payment platform Bridge for $1.1 billion, marking the largest acquisition in the cryptocurrency industry to date. Bridge aims to build a global payment network for stablecoins, providing software tools and technical support for businesses to accept stablecoin payments. It is worth mentioning that in this acquisition, Sequoia Capital, which holds 16% of Bridge's shares, is expected to earn over $100 million from the acquisition deal.
DeFi
The DeFi sector saw an initial explosion in February this year, with a financing scale exceeding $266 million, the highest of the year. This was mainly attributed to a16z's $100 million investment in the Ethereum re-staking protocol EigenLayer, which is also the only project in this sector with a financing scale exceeding $100 million this year; it boosted confidence in the cryptocurrency venture capital market at a time when its form was still unclear. Excluding this factor, the best performing month for DeFi was May, with 42 disclosed investment and financing events, the most this year, and a financing scale reaching $213 million.
As mentioned above, the number of investment and financing events and the financing scale of DeFi were 296 and $1.69 billion respectively, accounting for 23.51% and 18.22%. Among the financing news disclosed by DeFi projects, 40 events had a financing scale in the tens of millions, accounting for 13.51%, with more concentrated in the millions range.
Web3 Games
Compared to the boom of 2022, the gaming sector is much quieter this year. In 2022, the Web3 gaming sector disclosed 334 investment and financing events with a total financing scale of $4.4 billion, among which projects exceeding $10 million accounted for as high as 30%; while in 2024, this proportion is only 13.41%. Additionally, among the financing events disclosed this year, the highest was $42.7 million raised by blockchain video game development company Azra Games in Series A financing.
March was undoubtedly the most outstanding month for Web3 games this year, with a total financing amount reaching a peak of $155 million. During this period, the market disclosed a total of 7 financing events each exceeding $10 million, including the $35 million financing completed by the NFT card game Parallel, while a total of 24 financing events broke the $10 million mark throughout the year.
From the data statistics, perhaps due to the rise of narratives such as AI and DeSci, and the ongoing development of several large-scale game projects from the previous round of significant financing, pending market validation, Web3 games may no longer be regarded as the 'hope star' that investors are optimistic about; on the other hand, with mini-games on Telegram, especially point-earning games attracting millions to even billions of players, the attraction of 3A chain games, which require substantial funding and a long development cycle, is declining.
Web3 + AI
As the mainstream narrative of the entire technology industry, the combination of AI with blockchain and cryptocurrency has also become the direction chosen by many startups. Unlike the overall trend of the primary market, the AI sector has rapidly expanded and developed this year, maintaining a consistent upward momentum.
Looking at quarterly cycles, the AI sector disclosed 34 financing events in the third quarter, with a funding scale of $286 million, both marking the highest for this year. By the fourth quarter, although overall enthusiasm slightly decreased, it still remained far higher than in the first and second quarters.
In terms of funding scale, 15.2% of AI projects received funding in the tens of millions of dollars, among which the open-source AI platform Sentient raised $85 million in seed round financing led jointly by Peter Thiel's Founders Fund, Pantera Capital, and Framework Ventures, marking the largest financing in this sector.
DePIN
DePIN projects have also seen significant growth after AI, with a total of 47 investment and financing events throughout the year, with a financing scale close to $280 million. Among them, there were 9 financing events with amounts in the tens of millions of dollars, accounting for 19.56%.
The $50 million financing completed by the IoT blockchain platform IoTeX is the largest financing in this sector; the Solana ecosystem's DePIN protocol io.net and the Ethereum-based blockchain solar company Glow both secured $30 million, ranking second, occurring in March and October respectively. It is worth mentioning that the DePIN sector remained relatively stable throughout the year, raising a peak of $84.05 million in the third quarter.
Centralized Finance
This year, there was only one case in the centralized finance sector where the financing scale approached $100 million, specifically the digital asset financial services group HashKey Group, which completed nearly $100 million in Series A financing at a pre-investment valuation exceeding $1.2 billion. Additionally, this sector had a total of 30 investment and financing events reaching the tens of millions level, accounting for as high as 43.48%. Its average financing amount of $14.92 million is also the highest among all sectors. It is worth mentioning that in the overall hottest second quarter, the centralized finance sector performed rather flat, with both financing numbers and scales being the lowest of the year.
Consumer Applications
During the statistical process, consumer applications covered entertainment including music and streaming, SocialFi, NFTs, prediction markets, media, gambling, education, insurance, research, and information. This major category performed particularly well in May, with 26 disclosed financing events in a single month, raising $307 million. This was mainly due to the $150 million financing completed by the Web3 social media platform Farcaster announced in May, and the $70 million financing of the prediction platform Polymarket, which performed brilliantly in the U.S. presidential campaign, these were the two projects that raised the most financing in this sector.
According to statistics, consumer categories disclosed a total of 157 investment and financing events, with a funding scale of $817 million. In terms of funding scale, only 11.16% of consumer projects completed financing on the scale of tens of millions, ranking the lowest among all sectors.
Others
Other categories include blockchain applications in traditional industries such as cryptocurrency mining, DAO, DeSci, task reward platforms, healthcare, logistics, etc., with a total of 38 disclosed investment and financing events, the lowest across all sectors, with a funding scale exceeding $350 million. In this major category, cryptocurrency mining companies play a significant role. In terms of funding scale, Hut 8, a crypto miner, received $150 million in investment, and Auradine, a mining machine manufacturer, completed $80 million in Series B financing, ranking first and second respectively, both disclosed in the second quarter.
Investment Institutions
According to incomplete statistics, 47 cryptocurrency investment funds were launched in 2024, with a total scale of $4.34 billion. Among them, 13 funds raised over $100 million. Additionally, Paradigm, which was once criticized for 'defecting' from the cryptocurrency industry, announced in mid-June that it had raised $850 million for its third fund, focusing on early-stage cryptocurrency projects, making it the largest fund by scale in 2024.
It is worth mentioning that a16z announced in April that it had raised $7.2 billion, ultimately exceeding the company's previously set fundraising target by about 4%. Although it was not included in the statistics, as an investment institution with a top reputation in the cryptocurrency industry, a16z is expected to have a significant amount of funds available for investing in industry-related projects in the future.
In addition, this year, multiple project parties have jointly launched 15 ecological funds, with a total scale of $594 million. Among them, the $150 million Open Loot fund announced by Big Time Studios is the largest, aimed at promoting game development on the Web3 platform Open Loot, providing funding support, marketing, and development guidance for game studios.