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In H1 2023, venture capital funding declined significantly in the global blockchain market. Economic uncertainty, coupled with the collapse of big names like FTX and an overall downturn in venture capital funding, has hit the sector hard. The situation has been further dampened by the ongoing crisis in the banking sector and uncertain future regulations.
The scrutiny of crypto platforms has also increased amid the banking crisis in the United States. The Securities and Exchange Commission, in June 2023, sued Binance alleging that the firm committed a series of securities violations. All of these factors have resulted in a significant downfall in venture funding in blockchain-related firms in H1 2023. Despite the slowdown in venture capital funding, innovative startups have continued to raise early-stage rounds in the first half of 2023.
The firm is planning to use the capital for scaling its operations in markets like Kenya and the Philippines. From the short to medium-term perspective, Jia also aims to expand operations in more countries across West Africa, Latin America, and Asia. The firm is currently offering loans up to US$5,000 to small businesses that are left out of the formal banking system.
Another early-stage blockchain-related startup that has raised a funding round is Metatime, which is a project aiming to build a complete ecosystem of decentralized applications for Web3. The firm raised US$11 million in private funding in March 2023. The funding is expected to be used for supporting the growth of Metatime's ecosystem.
True I/O, a blockchain security firm, also announced that the firm had raised US$9 million in a Series A round in March 2023. The funding round was led by Deal Box Ventures. True I/O is planning to utilize the funding for accelerating the development of its Universal Communication Identifier, which is used for providing supply chain security for mobile or embedded devices.
In another funding deal, Elementus raised US$10 million in February 2023. The Series A-2 round was led by ParaFi Capital. The capital round means that the firm had raised a total of US$27 million since its inception. The firm offers blockchain data intelligence platforms to data-driven organizations and is planning to use the capital for new product development. In addition to financial institutions, some of the key government agencies in the United States are also using the data intelligence platform offered by Elementus.
Sei, a trading-focused blockchain firm, also announced that the firm had raised US$30 million in a funding round in April 2023. Jump Crypto, Multicoin Capital, and Flow Traders are among the many that participated in the fundraising round. The April 2023 round has valued the firm at a significant US$800 million. Notably, the firm raised its seed round of US$5 million in August 2022.
AI-focused blockchain firm CryptoGPT also raised US$10 million at a US$250 million valuation in April 2023. DWF Labs, a prominent investor during the challenging period of decreased funding in the crypto market, took the lead in the Series A funding round. The firm recently rolled out a Web3-focused AI assistant. Furthermore, it is also in the process of developing a ZK rollup layer 2 blockchain and data to AI engine.
Innovative startups strive to empower users by enabling them to generate income through the monetization of their data in diverse fields such as gaming, dating, education, and fitness. Going forward, the firm is also planning to roll out non-fungible tokens.
From the short to medium-term perspective, TechInsight360 expects more of such innovative startups to raise their early-stage funding rounds from venture capital firms. However, the total value raised by blockchain firms in 2023 is expected to remain below the 2022 levels in the global market.
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