VC investment in Crypto, Web 3 startups soars to over $500M this year
- ByStartupStory | December 24, 2021
Venture capital (VC) firms are eyeing investments in Indian startups that are carving themselves space in Web 3, which marks the next stage of the Internet’s evolution, and cryptocurrencies.
Startups that include crypto, blockchain – a kind of digital ledger — and non-fungible tokens (NFTs), or units of non-interchangeable data stored on blockchain, have raised $511 million this year, according to data provider Venture Intelligence.
Most of the money has gone into crypto startups, mainly exchanges, which have raised as much as $448 million, an increase of nearly 19 times from last year, the data shows.
The application side of crypto is still less developed versus the asset side, and in 2022, we will see more infrastructure and tooling for DAOs as well as some real-world applications of NFTs”, said Nitin Sharma, partner and global blockchain lead at early-stage VC firm Antler Global.
DAO is short for decentralized autonomous organization, a form of investor-directed venture capital fund. Funding in the space may increase 5-6 times next year with more global venture firms looking at the space, Sharma said. Clarity on regulation will also boost investments.
India is moving towards regulation of digital money amid surging interest in crypto among young, first-time investors. Crypto is not legal tender yet in the country although trading in virtual money is allowed.
“The pace of funding in Web 3 and Crypto was far ahead of other sectors in the second half of 2021. I expect it to continue in 2022 as an increasing number of stellar founding teams in India opt to build in this new segment and investors who believe in the move towards decentralization back them early,” said Vaibhav Domkundwar of Better Capital, a fund that has invested in more than 10 crypto startups so far.
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