The first quarter of 2024 is coming to a close, and there are signs of a positive shift in the sentiment around cryptocurrencies. This can be attributed to the launch of Bitcoin exchange-traded funds (ETFs) in January. The improved market dynamics could lead to increased venture capital investment in the crypto and blockchain industry, following a period of decline. According to Galaxy Digital, venture capital firms in this space raised $5.75 billion across 58 funds in 2023, a significant drop from the record-breaking $37.7 billion raised in 2022 across 262 funds. The last quarter of 2023 saw a slight recovery, with venture funding reaching $1.9 billion, a 2.5% increase from the previous quarter. This marked the first growth in venture capital investments in crypto startups since early 2022. There are several factors attracting investors, including the development of solutions that combine artificial intelligence and blockchain technologies, as well as the introduction of products targeting institutional investors.
One startup that has recently raised capital is Utila, an enterprise-focused wallet provider. They secured $11.5 million in seed funding from investors such as NFX, Wing VC, and Framework Ventures. Utila offers a self-custody wallet platform for institutional investors, supporting various chains like Bitcoin, Ethereum, and Solana. The platform has facilitated over $3 billion in transactions in the past six months and serves clients such as hedge funds, market makers, and brokers.
Another startup, Synnax, raised $1 million in pre-seed funding for their credit intelligence platform. This platform aims to establish an unbiased credit rating standard for the digital asset industry. Using decentralized artificial intelligence models, Synnax addresses the shortcomings of current credit rating systems, such as transparency and bias. The funding round was led by No Limit Holdings and received support from global investors like Edessa Capital and Kenetic Capital.
Sahara, a startup focused on decentralized AI networks, recently raised $6 million in a seed funding round. Polychain Capital led the round, with participation from Samsung Next, Matrix Partners, and others. Sahara develops autonomous Knowledge Agents (KAs) that analyze external and internal data, as well as data services for AI model training. The funding will support the growth of additional components within the Sahara ecosystem.
The TON Foundation, associated with Telegram’s blockchain project, received $8 million funding from Mirana Ventures. The investment is part of a partnership between the TON Foundation, Bybit, and the Mantle Network. Bybit has integrated the native token of TON, Toncoin, into its offerings, resulting in significant trading volume. TON Space, Telegram’s self-custodial wallet, is also connecting its users with Mantle Network through the integration of TON-based MNT tokens. The funds will be used to support community development and projects.
UXLINK, a web3 social platform, secured nearly $10 million in funding from investors like OKX Ventures and Web3Port Foundation. Unlike traditional social media platforms, UXLINK emphasizes two-way interactions and offers features like a social decentralized exchange for digital assets trading. Since its launch in April 2023, UXLINK has gained over 3.5 million verified users and 75,000 decentralized groups.
Ethereum layer 2 network TEN raised $9 million in a funding round led by banking consortium R3. Other backers include Republic Crypto, KuCoin Labs, and Magnus Capital. TEN, developed by Obscuro Labs, combines optimistic rollups and zero knowledge rollups to provide an encrypted layer 2 solution for developers. The platform is set to be released on the mainnet in October with features like programmable encryption, immediate bridges, and random number generation.
The launch of Bitcoin ETFs and the growing interest in combining AI and blockchain technologies are contributing to improved sentiment in the cryptocurrency market. This has led to increased venture capital investments in startups within the industry. The highlighted startups have successfully raised funding to support their innovative solutions and further growth.
I doubt these credit rating platforms will be able to solve the existing problems in the industry.