Article source: Zen
Author: Zen, PANews
As the saying goes, 'The spring river water warms the ducks first', financing information for projects is an important signal of market development, reflecting not only the competitiveness of the project itself but also the flow of market funds and confidence, and indicating the direction and trend of innovation. PANews releases a (financing weekly report) every Monday morning, continuously recording weekly financing market information. As the year comes to an end, we review the overall primary market performance based on the annual financing information to provide reference for investors.
Overview of the 2024 Financing Market
According to incomplete statistics from PANews, in 2024, the primary market in the cryptocurrency and blockchain fields disclosed a total of 1,259 financing events, with a total funding scale exceeding $9.3 billion. In terms of the total number and scale of financing, this year's investment market situation is basically on par with 2023, which recorded 1,174 transactions totaling $9.615 billion. Compared to 2022's 1,660 financing events with a total fund volume exceeding $34.8 billion, the past two years have formed a more stable pattern, with investment transactions tending towards more cautious and rational approaches.
It is worth mentioning that, aside from being close in total volume, the fluctuation trends of 'total financing amount' and 'number of financings' this year and in 2023 are also remarkably similar.
Firstly, the crypto investment market had a strong start, and after a vigorous advance, it peaked from March to May, with March's financing scale exceeding $1.03 billion, the only month this year where financing exceeded $1 billion. Close to this are April, May, and October, all with funding scales above $950 million.
Secondly, after a strong start, there was a slowdown in the middle, entering a low period from June to September. During this time, the monthly disclosed financing events only broke a hundred in August, while the financing scale for July and September was below $600 million.
Thirdly, there was a sudden surge entering the fourth quarter, with 106 disclosed financing events in October and over $957 million in financing, marking the best single month performance in the second half of the year. Although there was another downturn in November, the primary market performance in December also showed bright spots; as of December 22, the financing scale for this month had already exceeded $818 million.
With industry development, the narrative themes and categories of startups have become more diverse and rich than ever. Based on market trends, PANews broadly categorizes projects into eight sectors: DeFi, Web3 Games, Infrastructure & Tools, AI, DePIN, Centralized Finance, Consumer, and Others, and has compiled statistics on the financing conditions in each sector.
As the sector most favored by capital long-term, the number and amount of financing transactions in Infrastructure & Tools were the highest among all sectors, totaling 381 events and $3.66 billion; the second hottest sector this year was DeFi, with 296 events and $1.69 billion, both ranking second; Centralized Finance is the only sector outside of Infrastructure & Tools and DeFi that exceeds $1 billion in funding scale, and its average financing amount is also the highest at $14.92 million; AI projects, as an emerging category, grew rapidly this year, with nearly 100 disclosed financing events and funding around $600 million.
For detailed statistics on each sector, see below.
Infrastructure & Tools
Among all projects that completed financing this year, 30% belong to the Infrastructure & Tools sector, with the amount raised accounting for 39.46% of the total. This sector also disclosed the most large financing news, with events of tens of millions of dollars and above accounting for 27.82%, including 6 events with funding exceeding $100 million and a high of 106 events at the tens of millions level.
The financing situation in the Infrastructure & Tools sector is roughly on par with the overall trend, with a maximum of 48 financing announcements 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 round of the year. This round was led by Galaxy Digital, Dragonfly, and ParaFi Capital, with over 40 companies including SkyBridge and Morgan Creek Digital participating in the investment.
Additionally, in October this year, payment company Stripe acquired the stablecoin payment platform Bridge for a high price of $1.1 billion, making it the largest acquisition in the crypto 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. Notably, Sequoia Capital, which holds a 16% stake in Bridge, is expected to earn over $100 million from this acquisition.
DeFi
The DeFi sector saw an explosive start in February, with financing exceeding $266 million that month, the highest for the year. This was primarily due to a16z investing $100 million in Ethereum re-staking protocol EigenLayer, the only project in this sector with financing exceeding $100 million this year, boosting confidence in the crypto venture capital market amid unclear conditions. Excluding this factor, May was the best-performing month for DeFi, with 42 disclosed financing events, the most for the year, and a financing scale reaching $213 million.
As mentioned above, the number of financing events and financing scale for DeFi were 296 and $1.69 billion, accounting for 23.51% and 18.22% respectively. Among the disclosed financing news for DeFi projects, 40 events were at the tens of millions level, accounting for 13.51%, with more concentrated in the millions range.
Web3 Games
Compared to the thriving situation in 2022, the gaming sector appears much quieter this year. In 2022, the Web3 gaming sector reported 334 financing events with a total financing scale of $4.4 billion, with projects exceeding $10 million accounting for as much as 30%; in 2024, this proportion is only 13.41%. Furthermore, the highest disclosed financing event this year was the $42.7 million Series A funding completed by blockchain video game developer Azra Games.
March was undoubtedly the most prominent month for Web3 games this year, with total financing reaching a peak of $155 million. During this period, the market disclosed a total of 7 financing events of tens of millions of dollars, including NFT card game Parallel which completed $35 million, while there were a total of 24 financing events exceeding tens of millions for the entire year.
From a data analysis perspective, perhaps due to the rise of other narratives such as AI and DeSci, alongside ongoing development of several game projects that previously received substantial funding awaiting market validation, Web3 games may no longer be seen as the 'hope star'; on the other hand, with the surge of mini-games on Telegram, especially play-to-earn games attracting millions to even billions of players, the appeal of 3A blockchain games, which require significant funding and longer development cycles, is declining for investors.
Web3 + AI
As a mainstream narrative in the entire technology industry, the combination of AI with blockchain and cryptocurrencies has also become a direction chosen by many startups. Unlike the overall trend of the primary market, the AI sector has rapidly expanded and developed this year, remaining in an upward momentum.
Looking at it quarterly, in the third quarter, the AI sector announced 34 financing events, with a total funding scale of $286 million, both of which are the highest for this year. In the fourth quarter, overall enthusiasm slightly waned, but remained significantly higher than in the first and second quarters.
In terms of funding scale, 15.2% of AI projects received tens of millions of dollars, with the open-source AI platform Sentient raising $85 million in a seed round led by Peter Thiel's Founders Fund, Pantera Capital, and Framework Ventures, marking the largest financing in this sector.
DePIN
DePIN projects have seen significant growth following AI, with a total of 47 financing events throughout the year, raising nearly $280 million. Among these, 9 financing events were in the tens of millions of dollars range, accounting for 19.56%.
IoTeX, an Internet of Things blockchain platform, completed a $50 million financing, the largest in this sector; the Solana ecosystem's DePIN protocol io.net and Ethereum-based blockchain solar energy company Glow both received $30 million, ranking second, occurring in March and October respectively. Notably, the DePIN sector maintained stability throughout the year, raising a peak of $84.05 million in the third quarter.
Centralized Finance
This year, the centralized finance sector had only one financing event approaching $100 million, namely the digital asset financial services group HashKey Group completing nearly $100 million in Series A funding at a pre-money valuation exceeding $1.2 billion. Moreover, there were a total of 30 financing events at the tens of millions level, accounting for a high 43.48%. Its average financing amount of $14.92 million is also the highest among all sectors. Notably, in the hottest overall market in the second quarter, the centralized finance sector performed relatively flat, with both the number of financing events and funding scale being the lowest for the entire year.
Consumer Applications
In the statistical process, consumer applications cover entertainment including music and streaming, SocialFi, NFT, prediction markets, media, gambling, education, insurance, research, and information. This major category performed particularly well in May, with 26 disclosed financing events reaching a funding scale of $307 million. This was primarily due to the $150 million financing announced in May for the Web3 social media platform Farcaster, and the $70 million financing completed by the prediction platform Polymarket, which shone brightly in the U.S. presidential election, both being the two largest projects by financing amount in this sector.
According to statistics, a total of 157 financing events were disclosed for consumer projects, with a funding scale of $817 million. In terms of funding scale, only 11.16% of consumer projects completed financing at the tens of millions level, ranking the lowest among all sectors.
Others
Other categories include blockchain applications in traditional industries such as crypto mining, DAO, DeSci, task reward platforms, healthcare, logistics, etc., with 38 disclosed financing events, the lowest among all sectors, and a funding scale exceeding $350 million. In this major category, crypto mining companies play a crucial 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 funding, both publicly disclosed in the second quarter.
Investment Institutions
According to incomplete statistics, 47 crypto investment funds were launched in 2024, with a total scale of $4.34 billion. Among them, 13 funds raised over $100 million. Notably, Paradigm, which was once criticized for 'defecting' from the crypto industry, announced in mid-June that it raised $850 million for its third fund, which will focus on early-stage crypto projects, making it the largest fund by scale in 2024.
It is worth mentioning that a16z announced in April that it raised $7.2 billion, with a final total exceeding approximately 4% above the company's previously set fundraising target. Although not included in the statistics, as a top-tier investment institution in the cryptocurrency industry, a16z is sure to have considerable funds for future investments in industry-related projects.
Additionally, this year multiple project parties launched a total of 15 ecosystem 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.