The crypto industry’s fundraising efforts have taken quite a hit owing to the incessant crypto winter. Q3 was no exception.
The latest data suggest that new record lows were set for both the total funding amount and the number of deals during this period, reaching levels not seen since Q4 2020. The quarterly figures fell below $2.1 billion across a total of 297 deals, marking a 36% decrease in both categories compared to the previous quarter.
DeFi Among Well-Funded Sectors
According to Messari’s report, decentralized finance (DeFi) took the lead in terms of the number of funded deals, with 67 in total, whereas chain infrastructure secured the highest proportion of funding, comprising 18% of the total. The gaming sector also posted a strong quarter, amassing nearly $250 million in investments.
During Q3, DeFi emerged as the sector with the highest number of projects funded, boasting 68 deals. Investment within this sector was notably concentrated, with the exchange category representing 38% of all invested capital across 33 deals. In total, DeFi projects collectively secured $210 million, with an average deal size of $3 million.
Binance Labs actively participated in the DeFi sector, engaging in seven deals during the quarter. This included strategic investments of $10 million each in Helio Protocol, a liquid staking platform on BNB Chain, and Radiant Capital, a money market built on LayerZero. The largest DeFi deal of the quarter involved a $16.5 million Series A funding round for Brine, an order-book DEX constructed on Starkware.
Moreover, three out of the top four investors in DeFi, based on deal count, were closely affiliated with the ecosystem. Binance Labs, the Base Ecosystem Fund, and Polygon collectively accounted for 16 deals during the period.
Binance Labs – By Far The Most Active Investor
Despite being embroiled in legal battles, Binance Labs emerged as the most active investor for Q3.
The venture capital and incubator arm of Binance has 23 deals, surpassing the next closest investor, Robot Ventures, by more than double the number of investments. Throughout 2023, Binance Labs maintained an active investment strategy, focusing on the DeFi and gaming sectors, in addition to showing interest in projects developing zero-knowledge and privacy technology.
Interestingly, 12 of those deals involved projects participating in its accelerator program. Excluding these accelerator-related investments, the firm’s remaining 11 investments would still tie it with Robot Ventures in terms of Q3 deal activity.
