funding

Story Protocol, Sorella, BSX Exchange

Published

4 weeks ago

August 25, 2024

The crypto VC community turned out for several startups this week, including Story Protocol’s $80 million series B funding round.

The week, between Aug. 18 and Aug. 24, has been buzzing with activity in the crypto venture capital space. According to crypto funding tracker Crypto Fundraising, 32 blockchain startups raked in more than $202 million from various investors in that period.

Below we look at a few of the standouts.

Story Protocol, $80 million

Story Protocol raised $80 million in its series B round. Serial crypto VC firm Andreessen Horowitz led the round, which also saw participation from Polychain Capital, Hashed, Samsung Next, and SparkLabs Global among others.

The series B round pushes the San Francisco-based startup’s total funding to $140 million and values the company at an impressive $2.25 billion.

The company aims to tackle what it considers an escalating problem of intellectual property theft, particularly in the era of generative artificial intelligence.

Story’s blockchain network allows IP owners to store their creations on the platform, embedding licensing terms directly into smart contracts.

In that way, it ensures that IP owners are compensated whenever their content is used, countering the growing concerns of technology giants using AI models to ingest copyrighted material without proper authorization.

Sorella Labs, $7.5 million

Next on the list is Sorella Labs, also a San Francisco-based startup. The company secured $7.5 million in funding to further its work to develop tools designed to identify and process maximum extractable value activities on the Ethereum (ETH) blockchain.

Research-driven tech investment company Paradigm led this particular funding round. Other participants included Nascent, Uniswap Ventures, Robot Ventures, and Bankless Ventures.

Sorella Labs plans to use the proceeds to expand its operations and speed up the development of its key products, Brontes and Angstrom.

Corn, $6.7 million

Corn is another winner in this week’s crypto VC fundraising column. The Ethereum layer-2 network, which uses hybrid tokenized Bitcoin (BTC) as gas, collected $6.7 million in a seed round led by Polychain Capital.

Binance Labs, Framework Ventures, as well as Polygon (MATIC) co-founder Sandeep Nailwal also lent a hand in the round.

Corn is reportedly looking to create a “crop circle” ecosystem that matches users, applications, and token holders, to address challenges faced by other decentralized networks, including insufficient liquidity and limited token utility.

BSX Exchange, $6.2 million

Meanwhile, BSX Exchange, a decentralized derivatives protocol built on the Ethereum L2 network Base, raised $6.2 million through pre-seed and seed funding rounds.

🚨 Exciting news! 🚨
1/ The team at @bsx_labs is excited to announce a total fundraise of $6.2M, led by @blockchaincap and 50+ additional supporters
The funding was completed to further expand BSX product development — the liquidity layer for onchain derivatives and capital… pic.twitter.com/QxYtwg1pZZ
— BSX (@bsx_labs) August 21, 2024

The seed round, worth $4 million, was led by Blockchain Capital. Other notable investors include Bankless Ventures and Maelstrom, the family office of BitMEX co-founder Arthur Hayes.

With this fresh capital, BSX plans to expand beyond derivatives trading, launching a spot aggregator in September as well as several earn-and-stake products shortly after.

Orderly Network, $5 million

Orderly Network, a project developing a web3 liquidity layer, was also on the right end of a $5 million round of funding. OKX Ventures, Manifold Trading, and Origin Protocol are among its backers.

The team behind the project plan to use the funds to bolster its capabilities in creating a permissionless liquidity layer for web3 trading across multiple blockchains.

Currently, Orderly supports six chains, including the Ethereum mainnet and Polygon. It intends to provide deep liquidity for any asset across those networks.

Other funding rounds

Wrapping up the notable VC funding rounds of the week are three projects, Soulbound, Stork Network, and Thalex. Between them, they managed to raise more than $12 million, with the web3 social gaming space getting $4 million from Animoca Brands to further its mission of empowering its new creator economy.

Soulbound is building a platform that combines GameFi and SocialFi to offer a new digital experience. The platform’s builders say they will use the money to establish gaming partnerships, grow social interactions, and expand streamer bounties as well as social questing.

On its part, Stork Network earned $4.705 million in seed funding to expand its product suite, including developing its open data market. Lightspeed Faction and Lattice co-led the round, which also saw participation from CMS and Wintermute Ventures.

Finally, Thalex, a crypto derivative exchange, raised 3 million euros ($3.3 million) in a series A extension. According to Axios, which exclusively reported on the fundraising, backers in the extended round included Bitfinex, Bitstamp and Flow Traders. IMC and Wintermute also invested in the project.

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Follow-up

Andrena raises $18m, Vessel secures $10m

Published

1 month ago

August 11, 2024

admin

Several startups secured significant funds last week, including Andrena, Vessel, Cartridge and Pentagon Games.

Andrena, $18 million

In the biggest funding round last week, U.S. internet service provider Andrena raised $18 million through a series A funding led by Dragonfly Capital.

Notable venture firms that participated in the round include Castle Island Ventures, ParaFi, Wintermute Ventures, CMT Digital, and 6th Man Ventures.

Andrena has raised about $33 million in investments, with $15 million coming from a previous investment round, also led by DragonFly Capital.

The company is developing a decentralized autonomous network protocol named DAWN, which aims to help users sell their excess internet bandwidth to a network of providers.

Built on the conc ept of decentralized physical infrastructure networking, DAWN will leverage a network of wireless base stations mounted on rooftops to deliver mesh internet access without relying on a centralized provider.

Andrena has not provided a specific launch date for DAWN.

Vessel, $10 million

In a seed funding round on Aug. 8, Zero Knowledge-based decentralized exchange Vessel successfully secured $10 million.

Sequoia Capital led the effort. Scroll co-founders Sandy Peng and Ye Zhang, the Avalanche Foundation, Algorand Foundation, IMO Ventures, Folius Ventures, Incuba Alpha, and several angel investors also supported the funding.

⚓️We are excited to announce that Vessel has successfully secured $10M in seed round. These funds will be strategically utilized in:
– Integrating CEX efficiency with DEX transparency
– Enhancing liquidity efficiency
– Developing advanced ZKP solutions for DeFi
Our challenges… pic.twitter.com/tzRkMZlnCp
— Vessel (@VesselFinance) August 8, 2024

The capital raised will be used to merge the efficiency of centralized exchanges with the transparency of decentralized exchanges, enhance liquidity efficiency, and advance zero-knowledge-proof technologies for DeFi.

Vessel Finance describes itself as an emerging decentralized exchange powered by ZK technology that is evolving into a full-fledged layer-3 network for decentralized finance.

It aims to blend the efficiency and user-friendliness of CEXes with the transparency and security of decentralized platforms.

Cartridge, $7.5 million

Cartridge, an infrastructure provider specializing in on-chain games and autonomous worlds, announced the completion of a $7.5 million series A funding round on Aug. 5.

Bitkraft Ventures led the round, which included contributions from Fabric, Dune, StarkWare, Primitive, and Ergodic.

The company also unveiled Dojo 1.0, an open-source developer toolset designed for creating provable games. In conjunction with the funding announcement, Cartridge is backing several on-chain games set for release this summer, including Loot Survivor, Paved, and Dope Wars.

In an interview with GamesBeat, Cartridge CEO Tarrence V. said the new capital will expand the team and enhance the ecosystem. He noted that Dojo will provide the framework for developing fully on-chain games and is planning to build the games fully on the blockchain.

Two additional products are also in development: the Cartridge Controller, which manages player identity and reputation, and the Slot, an execution layer.

Pentagon Games, $6 million

Animoca Brands-backed web3 game developers Pentagon Games raised $6 million in a funding round, with support from Binance Labs, Polygon, Symbolic Capital (formerly Hyperedge Capital), NFX, Republic, The Spartan Group, and Yield Guild Games.

Led by co-founders Emma Liu and Idon Liu, Pentagon Games has a team with extensive expertise in the web3 sector. The Liu duo has a proven track record managing communities and projects with up to 1.2 million players, running blockchain operations, validating Polygon nodes, and developing some of the earliest web3 games. They are joined by Hugh Behroozy, the chief publishing officer, who brings over 15 years of experience in film, games, and visual effects.

CEO Emma Liu recently spoke about the company’s vision, saying they are excited to “lead the next generation of gaming.” The company is focused on developing a platform where gamers can engage with content in novel ways and receive rewards for their participation.

Emma noted that as the demand for unique virtual experiences and digital entities increases, gamers will increasingly seek out platforms offering these advanced features.

DeAgentAI, $6 million

Web3 AI network DeAgentAI secured $6 million in a seed funding round led by Web3.com Ventures and Vertex Capital. Other startups that supported the investment round include Higgs Capital, Kernel Labs, Waterdrip Capital, Tido Capital, PANONY, CatcherVC, Goplus, and UXLINK.

DeAgentAI utilizes advanced artificial intelligence to deliver specialized services across multiple industries. Operating on decentralized platforms like Solana (SOL) and Ethereum (ETH), it has developed an AI-worker layer that integrates AI technology with specialized skills to provide innovative solutions, including financial forecasting and creative writing.

With the support of investors Vertex Capital, the platform has promised its community that it will continue launching new products in the coming months.

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funding

Investors prefer ‘breakout trends’ over ‘moonshots,’ VC says

Published

1 month ago

August 11, 2024

admin

There are fewer crypto investments nowadays, according to venture capitalist Adam Cochran.

VCs often face pressure from their limited partners who are primarily focused on beating index fund returns.

Cochran — founder of the firm CEHV — explained in a thread on X.com: “VCs have slowed investing in crypto by a lot, and [it’s] a bit of a nuanced reason: 1. Most of them have LPs that just want to beat index fund returns. 2. Over a medium term the [risk/return ration] of owning Bitcoin and ETH will easily beat index funds, and can only be beat by early stage bets.”

See below.

1/10
VCs have slowed investing in crypto by a lot, and its a bit of a nuanced reason:
1. Most of them have LPs that just want to beat index fund returns.
2. Over a medium term the R:R of owning Bitcoin and ETH will easily beat index funds, and can only be beat by early stage… https://t.co/yOG4TPdkFx
— Adam Cochran (adamscochran.eth) (@adamscochran) August 9, 2024

VCs often target high-growth startups and emerging technologies that offer substantial upside potential.

For instance, the S&P 500 index fund, a common benchmark for U.S. equities, has delivered an average annual return of approximately 15% over the last five years, according to data from curvo.eu.

In contrast, Bitcoin (BTC) has largely outperformed index funds over the same period, garnering about 45% in average annual returns.

Cochran — a specialist in fintech, artificial intelligence and cryptocurrency — highlighted that even though crypto investments harbor high risks, they have historically outperformed index funds over the medium term, presenting high-reward opportunities. However, he added that VC funds are usually skeptical about making such investments at the early stage due to the risk factor of digital currencies.

The venture capitalist explained that many VCs opt to hold investments in Bitcoin and Ethereum (ETH), along with a few high-profile breakout projects, to generate fees and return capital.

Investors prefer ‘breakout trends’ over 'moonshots' and that's a problem, VC says - 1 — Crypto VC capital investment chart | Source: Galaxy Research

Per a recent study from Galaxy Research, in the first quarter of 2024, approximately 80% of venture capital funding was allocated to early-stage companies, with the remaining 20% going to later-stage firms.

Despite a decrease in interest from large generalist VC firms, which have either exited the crypto sector or significantly reduced their investments, crypto-focused early-stage venture funds have remained active.

Many of these funds still have capital from their 2021 and 2022 fundraises, allowing promising early-stage crypto startups to secure funding. However, later-stage startups face increased difficulty in raising capital due to the reduced involvement of larger VC players.

According to Cochran, during the last market cycle, VCs were more active in investing in applications that had already gained traction, such as OpenSea, hoping to capitalize on late-stage consumer growth.

Moreover, he believes that with interest in previous trends like non-fungible tokens, or NFTs, as well as AMM forks, DeFi, and layer 2 solutions cooling down and the market awaits the next big innovation, VC firms are in a holding pattern.

4/10
While every VC firm brands themselves as pro-innovation and in the trenches with the builders, most of them don’t actually pursue moonshots, they just throw capital at breakout trends.
Because they don’t actually have enough industry insights to take novel risk.
— Adam Cochran (adamscochran.eth) (@adamscochran) August 9, 2024

Cochran noted that while some builders continue to develop new ideas without external capital, discovering the next major trend is stalled.

This situation is exacerbated because VCs believe idle capital can earn substantial returns in money markets, discouraging early-stage investments.

He added that this period of inactivity serves as a litmus test for VC firms’ genuine commitment to the crypto industry.

Those with a deep understanding of the space can still make impactful early-stage investments. In contrast, others may only invest in later-stage opportunities, revealing a lack of true alignment with the sector.

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