According to crunchbase ‘s latest report, the first quarter of the year funding to VC-backed Web3 startups hit its lowest point since the very early days of the space as deal flow continues to slow.
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Venture funding plummeted 82% year to year, dropping from $9.1 billion in Q1 of 2022 to only $1.7 billion, per Crunchbase data.
The funding number is also a 30% decline from the final quarter of last year, and the lowest total since the fourth quarter of 2020 — which saw only $1.1 billion — when many people had never heard of Web3.
Deal flow also continued its pronounced drop, as only 333 deals were completed in the first quarter — down from 369 in the previous quarter and a sharp drop from the more than 500 announced in Q1 2022.
The total number of deals is the lowest since Q4 2020.
Perhaps nothing illustrates the differences between the first quarter of last year and the first quarter of the current one in terms of funding to Web3 startups more than the dramatic fall of big rounds.
In Q1 2022, VC-backed startups raised 29 rounds of more than $100 million. That included massive raises of $400 million or more by ConsenSys and Polygon Technology, as well as, of course, FTX and its U.S. affiliate FTX US.
The most recently completed quarter saw only two rounds hit the nine-figure mark, as VCs have hit the brakes on spending big in the space.