Crypto startups are popping up all over the world in recent years. Despite the crypto winter, many crypto startups seem to be thriving. According to a recent report by market intelligence firm, Messari, crypto startups raised a total of $30.3 billion in H1 2022. This figure was raised across 1,199 funding rounds and exceeded the total capital raised by crypto startups in 2021.
Read on as RR² Capital, outlines some of the largest funding rounds recorded for crypto startups.
What Is A Crypto Startup?
A Crypto startup is a relatively young company that focuses solely on all things crypto related. Startups typically have a business model that supports innovation and are usually founded by between 1 and 3 individuals.
The rising awareness and excitement of cryptocurrency and blockchain applications are ushering crypto startups into the limelight.
How Are Crypto Startups Funded?
During the early stages, most crypto startups are usually self-funded by the owners and the community. Although some startups, especially those with good potential, manage to receive funding from Venture Capital (VC) firms like RR² Capital, who invest in innovative early stage crypto, NFT and DeFi projects leading disruption in the crypto industry.
Crypto startups tend to use methods such as Initial Coin Offerings (ICOs), Initial DEX Offerings (IDOs) and more to raise funds. These funds are often used to launch, upscale and maintain crypto projects. All of these methods mentioned serve as valid methods for helping crypto startups raise the capital required to launch their project or business.
What Are Funding Rounds?
The crypto industry is flourishing with growth over the past few years. Many VC firms and other institutional investors are keeping a close eye on crypto startups as the potential for profit is exponential. That being said, there are various different types of funding rounds that crypto startups can benefit from.
Seed Funding Round
In the first stages of their operations, many crypto startups will seek financial backing. This will occur when the primary business plan has been implemented and proven successful. This funding round is known as the seed funding and is used to set up things like offices, websites and internal departments on a small scale.
Series A Funding Round
This occurs once a startup has gained some form of traction and passed various Key Performance Indicators (KPIs). For example, they have a valid product, a strong community base and have steady revenue. The series A funding round will provide the startup with capital to further expand. Areas of growth will often include revenue growth, marketing, operations and more. At this point, investors are subject to significantly less risk as the startup has somewhat established itself.
Series B Funding Round
When a crypto startup reaches Series B funding, this shows that its primary business plan is successful and that the startup is ready to scale further. The goal of this funding round is to scale by expanding their team so the company can grow their customer base. In this stage, a company will typically invest in things like marketing, sales, human resources, business development and customer service.
Series C Funding Round
If a company makes it to the Series C stage, they are doing incredibly well. So much as to say they are ready to expand to new markets, acquire businesses and develop new products. A Series C is often the last round of funding that a startup participates in. The Series C round is often the final push to prepare a startup for its Initial Public Offering (IPO). Some startups do, however, go in to raise Series D, E, F and beyond funding rounds.
Why Do Venture Capitalists Invest In Crypto Startups?
Venture Capital investment firms have a strong appetite for emerging markets, this is why crypto startups are so popular among VCs. The crypto and blockchain space has a massive sense of urgency and excitement surrounding it. VCs can see the potential that crypto has to offer and they know there is massive earning potential, especially considering rising inflation throughout the world. Many VCs try and invest in early stage startups to maximize earning potential.
The fact that crypto startups have raised $30.3 billion in H1 2022, despite a massive slip of over 80% in the crypto market is a telling tale. They see the potential, and they’re getting in when the market is at its worst.
VCs are constantly on the lookout for innovative crypto startups who have the potential to disrupt the industry and tap into new markets, and thus, those who will deliver the highest possible Return On Investment (ROI). There are now various VC firms, like RR² Capital who are solely devoted to investing in crypto and blockchain startups.
The Top 10 Highest Funded Crypto Startups
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BlockFi – $1.4 Billion
BlockFi has successfully raised a total of $1.4 billion in funding over 13 rounds. Their latest funding of $400 million was raised on 21 June 2022 from a Debt Financing round by cryptocurrency exchange FTX.
BlockFI is a New-Jersey based cryptocurrency lending provider founded in 2017. BlockFI offers various products spanning multiple categories. The platform’s most popular offerings include crypto-collateralized loans and interest-bearing accounts which allow users to earn interest on their crypto holdings.
While the crypto lender may have earned the title of the highest funded crypto startup, things are not necessarily going well for BlockFi.
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Trade Republic – $1.3 Billion
Trade Republic has successfully raised a total of $1.3 billion in funding over 5 rounds. Their latest funding of €250 million was raised on 3 June 2022 from a Series C funding round. A total of 9 investors participated in the Series C funding, including Sequoia Capital, Thrive Capital and Accel.
Trade Republic is a German-based mobile only and commission-free broker founded in 2015. Through Trade Republic, users can buy, sell and trade cryptocurrencies, traditional finance products like stocks, ETFs and premium derivatives all on a mobile app. Trade Republic is a financial institution regulated by BaFin in Germany. Users’ accounts are protected up to €100,000.
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Fireblocks – $1 Billion
Fireblocks has successfully raised a total of $1 billion in funding over 5 rounds. Their latest funding of $550 million was raised on 1 December 2021 from a Series E funding round. A total of 10 investors participated in the Series E funding, including Spark Capital, Sequoia Capital and ParaFi Capital.
Fireblocks is a digital asset custody, transfer and settlement platform founded in 2018. Fireblocks plays a crucial role in digital asset security and helps financial institutions protect crypto assets from theft or hackers by using breakthrough MPC & patent-pending chip isolation technology to secure private keys, API credentials and eliminate the need for deposit addresses. Fireblocks markets itself as the all-in-one platform for running your digital asset business.
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Celcius Network – $864.3 Million
Celcius Network has successfully raised a total of $864.3 million in funding over 7 rounds. Their latest funding of $350 million was raised on 24 November 2021 from a Series B funding round. It is unclear who or how many investors participated in the Series B funding.
Celsius Network is a bankrupt cryptocurrency lending platform that currently owes around $4.7 billion to users. Before their bankruptcy, Celsius offered loans to users using cryptocurrencies like Bitcoin and Ethereum as collateral. Users could also deposit cryptocurrencies into their Celcius wallet and earn interest. In June 2022, Celsius halted withdrawals due to “extreme market conditions”. One month later, Celsius filed for Chapter 11 bankruptcy.
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Sorare – $739.2 Million
Sorare has successfully raised a total of $739.2 million in funding over 4 rounds. Their latest funding of $680 million was raised on 20 September 2021 from a Series B funding round. A total of 19 investors participated in the Series B funding, including SoftBank, LionTree and Futury Capital.
Sorare is a blockchain-based fantasy sports game founded in 2018. Players can use digital player cards to buy, sell, trade and manage a virtual team. Sorare offers Non-Fungible Token-based games for football, baseball, and basketball. Players can collect officially licensed digital cards featuring the world best football, baseball, and basketball players. Users can buy, trade, sell and manage a virtual team with digital player cards. You can build your collection and compete with other players.
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ConsenSys – $726.7 Million
ConsenSys has successfully raised a total of $726.7 million in funding over 7 rounds. Their latest funding of $1.7 million was raised on 18 October 2022 from a Secondary Market funding round. A total of 1 investor participated in the funding round: SharesPro.
ConsenSys is a blockchain software technology company based in New York. The company was founded by Joseph Lubin in 2014. ConsenSys enables individuals and businesses to build advanced Ethereum applications. ConsenSys has played a vital role in the development of the Ethereum community and has been at the forefront of innovation. The company is responsible for some of the most notable advancements including Decentralized Finance (DeFi), Non-Fungible Tokens (NFTs) and various other solutions.
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Bitpanda – $546 Million
Bitpanda has successfully raised a total of $536 million in funding over 6 rounds. Their latest funding of $263 million was raised on 17 August 2021 from a Series C funding round. A total of 5 investors participated in the Series C funding, including Valar Ventures, LeadBlock Partners and Jump Capital.
Bitpanda is a crypto exchange based in Austria. The exchange was founded in 2014 and is one of the top Bitcoin and crypto exchanges in Europe. The platform provides a variety of different options and features from automatic purchases to the ability to trade stocks, commodities, precious metals, ETFs and cryptocurrencies like Bitcoin.
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Chainalysis – $536.6 Million
Chainalysis has successfully raised a total funding amount of $536.6 million over 10 rounds. Their latest funding of $170 million was raised on 11 May 2022 from a Series F funding round. A total of 7 investors participated in the Series F funding, including FoundersClub, Emergence Capital and Blackstone Group.
Chainalysis is an American blockchain analysis company headquartered in New York. The firm provides data, research and software to government agencies, cryptocurrency businesses, and financial institutions to help them engage with cryptocurrency and blockchain technology. Data provided by Chainalysis is used by governments, crypto startups and other financial institutions to make critical decisions, encourage innovation, and to protect consumers.
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Anchorage Digital – $487 Million
Anchorage Digital has successfully raised a total funding amount of $487 million over 5 rounds. Their latest funding of $350 million was raised on 15 December 2021 from a Series D funding round. A total of 19 investors participated in the Series D funding, including PayPal Ventures, Goldman Sachs, BlackRock and Alameda Research.
Anchorage Digital is a crypto asset platform founded in 2017. The platform gives institutions easy access to crypto custody, trading, financing, staking and more.
Anchorage Digital became the first federally chartered cryptocurrency bank in 2021 after receiving approval from the Office of the Comptroller of the Currency (OCC).
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FalconX – $477 Million
FalconX has successfully raised a total funding of $477 million over 8 rounds. Their latest funding of $150 million was raised on 22 June 2022 from a Series D funding round. A total of 6 investors participated in the Series D funding, including Wellington Management, Tiger Global Management and Adams Street Partners.
FalconX is a US-based digital asset trading platform founded in 2018. The platform provides clients fast, secure and reliable execution using data science to eliminate slippage and hidden fees.
FalconX’s digital assets platform enables institutions to access and manage all of their crypto strategies through a single interface with smooth workflows. This makes it easy to execute trades, credit, and clearing all in one space. FalconX’s crypto-as-a-service product makes it easy for top banks, fintech companies, and investment firms to add crypto to their product offerings. The company’s goal is to get the next billion users into the crypto space.
As you can see, despite unfavorable market conditions, many crypto related startups are still thriving, receiving millions of Dollars in funding from VCs to continue to build during the bear market. We’re excited to see what the future holds in terms of funding. We expect the funding of crypto related startups to continue to thrive in H2 of 2022 and into the future.
About RR² Capital
For more information about RR² Capital and our expansive disruptive technology-focussed investment portfolio, visit our website here or send us a mail here.
