The second half of 2022 brought a noticeable drop in investments by VCs (venture capitalists) across all relevant blockchain industry sectors, according to the latest report published by Cointelegraph Research.
Although the value of financing obtained for the whole year was greater than $5 billion, which was higher than in 2021, there was a significant slowdown between June and December. Specifically, in the last three months of the year, funding came in at just $2.3 billion and fell to $660 million in December.
The report classifies the blockchain industry into five main sectors: centralized finance (CeFi), decentralized finance (DeFi), infrastructure, Web3 and non-fungible tokens (NFTs). In the first half of the year, funding totaled $30 billion, which is almost as much as the entire year of 2021.
When it looked like the record figure would be doubled, the crypto winter and the collapse of more crypto-oriented businesses made VCs less eager to invest their funds. As a result, the total amount raised in H2 2022 was $7.23 billion, sliding little by little every month, as shown in the chart below.
Web3 Was the Most Active Part of the Blockchain Industry
The number of transactions in the fourth quarter fell to 182, and only five exceeded $100 million. Within this group, investments in the Web3 sector, which includes Metaverse and GameFi, have proven to be the most popular. In contrast, the least common were investments in NFTs and CeFi.
During 2022, the Web3 sector accounted for 616 deals, while CeFi accounted for only 201. Interestingly, the value of financing was the same at $9.2 billion for both. Also, the average transaction for Web3 was valued at $15.4 million, while in CeFi, it was valued at $45.6 million.
DeFi attracted $3.1 billion in 299 deals and NFTs $3 billion in 243 sales. The infrastructure sector proved to be the most profitable; of the 295 financing deals completed, companies managed to raise nearly $12 billion in capital, which is an average of $40.1 million per deal.
The data was confirmed in a separate report by Crunchbase. It showed that funding for Web3 startups fell by nearly $7 billion in Q4 2022, from $9.3 billion to $2.4 billion. Despite the drastic descent in the latter part of the year, the entire year of 2022 turned out to be quite positive for Web3 companies.
Watch the recent FMLS22 panel discuss back-office technology in the fintech business.
Fintech Financing Falls Along with Blockchain Investments
It’s not just blockchain startups and young companies that have suffered in 2022, but so has the wider financial technology (fintech) sector. According to Innovative Finance, global support for the fintech
Fintech
Financial Technology (fintech) is defined as a technology that is oriented towards automating and strengthening the delivery and application of financial services. The origin of the term fintechs can be traced back to the 1990s where it was mainly used as a back-end system technology for famous financial institutions. However, it has since grown outside the business sector with an increased focus on consumer services. What Purpose Do Fintechs Serve? The main purpose of fintechs would be to provide
Financial Technology (fintech) is defined as a technology that is oriented towards automating and strengthening the delivery and application of financial services. The origin of the term fintechs can be traced back to the 1990s where it was mainly used as a back-end system technology for famous financial institutions. However, it has since grown outside the business sector with an increased focus on consumer services. What Purpose Do Fintechs Serve? The main purpose of fintechs would be to provide
Read this Term sector shrank to $95 billion, or by 30%. The number of completed transactions fell by nearly 1,000 to 5,263.
The UK fintech industry has been more resilient to adverse conditions. In the UK, the value of funding fell by just 5% to $10.2 billion.
“London’s fintech industry has consistently proven itself to be both resilient and ambitious in the face of economic challenges. As businesses prepare for a turbulent 2023, fintech firms can play a vital role. Our industry can and will bounce back quickly, driving growth, job creation and enabling businesses to reach their full potential,” said Khalid Talukder, the co-founder of DKK Partners.
The second half of 2022 brought a noticeable drop in investments by VCs (venture capitalists) across all relevant blockchain industry sectors, according to the latest report published by Cointelegraph Research.
Although the value of financing obtained for the whole year was greater than $5 billion, which was higher than in 2021, there was a significant slowdown between June and December. Specifically, in the last three months of the year, funding came in at just $2.3 billion and fell to $660 million in December.
The report classifies the blockchain industry into five main sectors: centralized finance (CeFi), decentralized finance (DeFi), infrastructure, Web3 and non-fungible tokens (NFTs). In the first half of the year, funding totaled $30 billion, which is almost as much as the entire year of 2021.
When it looked like the record figure would be doubled, the crypto winter and the collapse of more crypto-oriented businesses made VCs less eager to invest their funds. As a result, the total amount raised in H2 2022 was $7.23 billion, sliding little by little every month, as shown in the chart below.
Web3 Was the Most Active Part of the Blockchain Industry
The number of transactions in the fourth quarter fell to 182, and only five exceeded $100 million. Within this group, investments in the Web3 sector, which includes Metaverse and GameFi, have proven to be the most popular. In contrast, the least common were investments in NFTs and CeFi.
During 2022, the Web3 sector accounted for 616 deals, while CeFi accounted for only 201. Interestingly, the value of financing was the same at $9.2 billion for both. Also, the average transaction for Web3 was valued at $15.4 million, while in CeFi, it was valued at $45.6 million.
DeFi attracted $3.1 billion in 299 deals and NFTs $3 billion in 243 sales. The infrastructure sector proved to be the most profitable; of the 295 financing deals completed, companies managed to raise nearly $12 billion in capital, which is an average of $40.1 million per deal.
The data was confirmed in a separate report by Crunchbase. It showed that funding for Web3 startups fell by nearly $7 billion in Q4 2022, from $9.3 billion to $2.4 billion. Despite the drastic descent in the latter part of the year, the entire year of 2022 turned out to be quite positive for Web3 companies.
Watch the recent FMLS22 panel discuss back-office technology in the fintech business.
Fintech Financing Falls Along with Blockchain Investments
It’s not just blockchain startups and young companies that have suffered in 2022, but so has the wider financial technology (fintech) sector. According to Innovative Finance, global support for the fintech
Fintech
Financial Technology (fintech) is defined as a technology that is oriented towards automating and strengthening the delivery and application of financial services. The origin of the term fintechs can be traced back to the 1990s where it was mainly used as a back-end system technology for famous financial institutions. However, it has since grown outside the business sector with an increased focus on consumer services. What Purpose Do Fintechs Serve? The main purpose of fintechs would be to provide
Financial Technology (fintech) is defined as a technology that is oriented towards automating and strengthening the delivery and application of financial services. The origin of the term fintechs can be traced back to the 1990s where it was mainly used as a back-end system technology for famous financial institutions. However, it has since grown outside the business sector with an increased focus on consumer services. What Purpose Do Fintechs Serve? The main purpose of fintechs would be to provide
Read this Term sector shrank to $95 billion, or by 30%. The number of completed transactions fell by nearly 1,000 to 5,263.
The UK fintech industry has been more resilient to adverse conditions. In the UK, the value of funding fell by just 5% to $10.2 billion.
“London’s fintech industry has consistently proven itself to be both resilient and ambitious in the face of economic challenges. As businesses prepare for a turbulent 2023, fintech firms can play a vital role. Our industry can and will bounce back quickly, driving growth, job creation and enabling businesses to reach their full potential,” said Khalid Talukder, the co-founder of DKK Partners.
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