Author: Zen, PANews
Spring water warms the ducks first, and the financing information of projects is an important signal of market development, reflecting not only the competitiveness of the projects themselves but also the direction and confidence of market funds, as well as indicating innovative directions and trends. PANews releases the 'Financing Weekly Report' column every Monday morning, continuously recording weekly financing market information. As the year comes to an end, a review of this year's overall primary market performance based on annual financing information provides a reference for investors.
Overview of the 2024 Investment and Financing Market
According to incomplete statistics from PANews, there were a total of 1,259 disclosed financing events in the primary market of the cryptocurrency and blockchain sector in 2024, with a total capital scale exceeding $9.3 billion. In terms of the number and scale of financing, this year's investment and financing market situation is roughly comparable to that of 2023, which had 1,174 transactions completing $9.615 billion in financing. Compared to 1,660 financing events in 2022 with a total capital exceeding $34.8 billion, the past two years have formed a more stable trend, with investment transactions tending towards more cautious and rational approaches.
It is worth mentioning that aside from being close in total, the trends of 'total financing amount' and 'number of financing events' this year and 2023 are also remarkably similar.
Firstly, the crypto investment and financing market achieved a good start this year and reached a peak in March to May amid rapid progress, with financing scale exceeding $1.03 billion in March, the only month this year where financing amounts exceeded $1 billion. Closely following were April, May, and October, with capital scales all above $950 million.
Secondly, after a strong start, momentum began to wane in the middle of the year, entering a low period from June to September. During this time, the number of disclosed financing events only surpassed a hundred in August, while the financing scale in July and September was both below $600 million.
Thirdly, there was a sudden surge entering the fourth quarter, with 106 financing events disclosed in October and over $957 million in financing, marking the best performance for a single month in the second half of this year. Although November saw a downturn again, December's primary market performance also had its highlights, with financing exceeding $818 million as of December 22.
With the development of the industry, the narrative themes and categories of startups are more diverse than ever. Based on market hotspots, PANews broadly categorizes projects into eight sectors: DeFi, Web3 games, Infrastructure & Tools, AI, DePIN, Centralized Finance, Consumer, and Others, and compiles statistics on the financing situation in each sector.
As the sector most favored by capital over the long term, the number and amount of investment and financing transactions in Infrastructure & Tools are the highest among all sectors, with figures of 381 and $3.66 billion, respectively; the second hottest sector this year is DeFi, with figures of 296 and $1.69 billion, both ranking second; Centralized Finance is the only sector besides Infrastructure & Tools and DeFi with capital scale exceeding $1 billion, with the highest average financing amount of $14.92 million; AI projects, as an emerging category, grew rapidly this year, with disclosed financing events nearing a hundred and a capital scale around $600 million.
For detailed statistics of each sector, see below.
Infrastructure & Tools
Among all the 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-scale financing announcements, with financing events at the tens of millions level and above accounting for 27.82%, among which there were 6 instances with financing scale exceeding $100 million and as many as 106 instances in the tens of millions.
The financing situation trend in the Infrastructure & Tools sector is roughly similar to the overall trend, with a maximum of 48 financing announcements disclosed in February; the single-month financing peak 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 over 40 companies participating in the investment, including SkyBridge and Morgan Creek Digital.
Additionally, in October this year, payment company Stripe acquired the stablecoin payment platform Bridge for $1.1 billion, marking 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 accepting stablecoin payments. Notably, Sequoia Capital, which owns 16% of Bridge, is expected to gain over $100 million from the acquisition deal.
DeFi
The DeFi sector first erupted in February this year, with financing exceeding $266 million that month, marking the highest amount for the year. This was mainly due to a16z's $100 million investment in the Ethereum restaking protocol EigenLayer, which was the only project in this sector with financing exceeding $100 million this year, boosting confidence in the crypto venture capital market before its form was even clear. Excluding this factor, the best-performing month for DeFi was May, with 42 disclosed financing events, the most for the year, and financing also reaching $213 million.
As mentioned above, the number and scale of financing events in DeFi were 296 and $1.69 billion, accounting for 23.51% and 18.22%, respectively. Among the disclosed financing news for DeFi projects, there were 40 events with financing amounts in the tens of millions, accounting for 13.51%, with more concentrated in the millions range.
Web3 Games
Compared to the bustling year of 2022, the gaming sector is much quieter this year. In 2022, the Web3 gaming sector disclosed 334 financing events, with a total financing scale of $4.4 billion, of which projects exceeding $10 million accounted for as high as 30%; whereas in 2024, this ratio is only 13.41%. Additionally, among the disclosed financing events this year, the highest was $42.7 million raised in Series A financing by the blockchain video game development company Azra Games.
March was undoubtedly the standout 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 amounting to tens of millions of dollars, including the $35 million raised by the NFT card game Parallel, while there were 24 instances of financing exceeding $10 million throughout the year.
From the data statistics, perhaps due to the rise of other narratives like AI and DeSci, and several game projects that received significant funding in the previous round still under development and awaiting market validation, Web3 games may no longer be viewed as the promising 'hope star'; on the other hand, with mini-games on Telegram, especially play-to-earn games attracting tens of millions to even hundreds of millions of players, the appeal of AAA blockchain games that require substantial funding and lengthy development cycles for investors is declining.
Web3 + AI
As the mainstream narrative of the entire technology industry, the combination of AI with blockchain and cryptocurrency has also become a direction chosen by many startups. Unlike the overall trend of the primary market, the AI sector experienced rapid expansion and development this year, consistently maintaining an upward momentum.
Looking at it quarterly, the AI sector announced 34 financing events in the third quarter, with a capital scale reaching $286 million, all being the highest of the year. By the fourth quarter, while the overall heat slightly declined, it still remained significantly higher than the first and second quarters.
In terms of capital scale, 15.2% of AI projects received financing at the tens of millions level, among which the open-source AI platform Sentient raised $85 million in seed financing led by Peter Thiel's Founders Fund, Pantera Capital, and Framework Ventures, making it the largest scale financing in this sector.
DePIN
DePIN projects are another sector that has shown significant growth after AI, with a total of 47 financing events throughout the year, approaching $280 million in financing scale. Among them, 9 financing events had amounts in the tens of millions, accounting for 19.56%.
The $50 million financing completed by the IoTeX blockchain platform is the largest financing in this sector; the Solana ecosystem's DePIN protocol io.net and the Ethereum-based blockchain solar company Glow both raised $30 million, ranking second, occurring in March and October, respectively. Notably, the DePIN sector remained stable throughout the year, raising the highest amount of $84.05 million in the third quarter.
Centralized Finance
This year, the centralized finance sector had only one instance of financing approaching $100 million, namely the digital asset financial services group HashKey Group completing nearly $100 million in Series A financing with a pre-investment valuation exceeding $1.2 billion. Additionally, this sector had a total of 30 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. Notably, during the overall hottest market in the second quarter, the centralized finance sector performed rather mediocre, with both the number of financing events and capital scale being the lowest of the year.
Consumer Applications
In the statistical process, consumer applications cover 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, totaling $307 million. This was mainly due to the announcement in May of $150 million raised by the Web3 social media platform Farcaster, along with the $70 million raised by the prediction platform Polymarket, which shone in the U.S. presidential election, making them the two projects with the highest financing amounts in this sector.
According to statistics, consumer projects disclosed a total of 157 financing events, with a total capital scale of $817 million. In terms of capital scale, only 11.16% of consumer projects completed financing in the tens of millions, ranking the lowest among all sectors.
Others
The Others category includes traditional industry blockchain applications such as crypto mining, DAOs, DeSci, task reward platforms, healthcare, logistics, etc., with 38 disclosed financing events, the lowest across all sectors, and a capital scale exceeding $350 million. Within this major category, crypto mining enterprises play a crucial role. In terms of capital 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, 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. 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 in terms of capital scale in 2024.
It is worth noting that a16z announced a fundraising of $7.2 billion in April, eventually exceeding the company's earlier fundraising target by about 4%. Although not included in the statistics, as an investment institution with a top reputation in the cryptocurrency industry, a16z will undoubtedly have significant funds available for investing in industry-related projects in the future.
Additionally, this year several project parties launched a total of 15 ecological funds, with a total scale of $594 million. Notably, the Open Loot fund established by Big Time Studios, with a scale of $150 million, is the largest, aimed at promoting game development on the Web3 platform Open Loot, providing funding support, marketing, and development guidance for game studios.