Quarterly Fundraising Insights for Q2 2023: A Look into Gaming and Social Network Developments
In Brief
The report highlights trends prevalent in the AI, crypto, and web3 domains, pinpointing significant industries and key players that made a mark during the quarter.
In Q2 2023, 78 web3 projects collectively garnered an impressive $367,955,000.
21 NFT projects raised $72,816,000.
Metaverse Post is unveiling the Fundraising Insights for the second quarter of 2023, where we investigate the dynamics in the AI, crypto, and web3 landscapes, showcasing pivotal industries and major figures of the quarter.
Web3 Trends: Leading Projects Across Categories
During the second quarter of 2023, 78 web3 initiatives attracted a total of $367,955,000 in funding. The gaming sector emerged as the dominant force, capturing 31.24% of total web3 fundraising during this period. Following gaming, social networking and payment startups also performed well, securing $29 million and $25,750,000, respectively.
Gaming
In total, 20 gaming startups managed to raise $115,100,100, establishing gaming as the premier category within the web3 ecosystem. Interestingly, there was a slight uptick in investor enthusiasm for this sector in Q1 of this year, where 23 gaming initiatives amassed $201,720,473.
Throughout 2022, the gaming category received $4,487.3 million. Venture Capitalists directed their attention toward play-to-earn businesses, blockchain-based casinos, collectibles, loot boxes, and football-themed gaming ventures.
Web3 gaming studio Pomerium received $20 million raised in a strategic funding round, spearheaded by an undisclosed angel investor. The studio plans to utilize the capital to broaden its lineup of blockchain-driven games.
Karate Combat raised $18 million secured in a funding round led by Bitkraft Ventures, with backing from Delphi Digital, The Operating Group, Hashkey, Alpha Wave Global, Lattice, M13, Santiago Santos, and RooxieXBT. The funds will enable the continuation of developing its immersive martial arts league, enhanced by Unreal Engine’s cutting-edge XR technology.
Web3 gaming ecosystem RACA received $16 million acquired in a strategic funding round led by DWF Labs. Notably, the investment firm also secured an undisclosed quantity of RACA tokens in conjunction with this agreement. The financing will be directed toward further growing its web3 gaming infrastructure.
Web3 gaming launcher and game store aggregator HyperPlay raised $12 million raised in a Series A funding round co-led by Griffin Gaming Partners and Bitkraft Ventures, along with support from ConsenSys, Ethereal Ventures, Delphi, Game7, Mirana Ventures, and Monoceros Ventures. The funding is earmarked for enhancing their flagship game launcher and expanding their reach internationally.
Open-world RPG adventure title Illuvium received An additional $10 million secured in a strategic funding round led by Framework Ventures will assist the developer in fast-tracking the growth of its AAA gaming universe. These funds will also help support remote contributors.
Social Network
The social networking sector ranked as the second most active industry in Q2 2023. Despite only three startups securing funding in this category, a total of $29 million flowed into it.
Social primitive protocol Lens received $15 million from a cohort of angel investors including Haydan Adams of Uniswap, Alex Atallah of OpenSea, Bali Srinivasan, Sandeep Nailwal of Polygon, Kevin Owocki of Bitcoin, Hitren Shah of Nire, Sébastien Borget of The Sandbox, Maggie Love of SheFi, and pplplsr of Shibuya. The startup intends to channel these funds into fostering the adoption of the next evolution of the internet, a platform driven by human connections.
Information protocol RSS3 raised $10 million raised in a private token sale to DWF Labs. The startup recently launched RSS3 AIOP, an environment designed for AI training that provides web3 insights.
PoP Planet , a tool designed for private domain management within the web3 ecosystem, raised $4 million secured in a funding round led by Foresight Ventures. These funds will be allocated towards ongoing product development, as well as incentivizing creators upon launch.
Payment
In terms of total capital raised, the payments category is the third most funded in Q2 2023, with seven startups accumulating a collective $25,750,000.
Azteco , a company that specializes in offering Bitcoin vouchers for everyday use, raised $6 million raised in a seed round orchestrated by Jack Dorsey, with participation from Lightning Ventures, Hivemind Ventures, Ride Wave Ventures, Aleka Capital, Visary Capital, Gaingels, David Van Der Weele, and Sunil Rajaraman. The startup intends to allocate the funds towards product development and expanding into Latin America and Europe.
Poko , a provider facilitating fiat transactions for web3, received $4.5 million raised in a seed funding round led by Y Combinator, NAZCA, and Global Founders Capital. Additional backing came from Goodwater Capital, Soma Capital, Amasia, CreditEase, Dentsu Ventures, Orange DAO, MS&AD Ventures, and Plug and Play. The startup focuses on creating a direct checkout process and an onboarding aggregator.
Crypto payments platform BoomFi raised $3.8 million secured in a seed round led by White Star Capital. These funds are earmarked for building strategic partnerships, advancing product development, and expanding their merchant network within the web3 space.
Insurance
Meanwhile Insurance Bitcoin raised $19 million in two Seed rounds. ChatGPT CEO Sam Altman The initial round was co-led by former Stripe executive Lachy Groom, while the second seed round was spearheaded by Gradient Ventures. Standard Crypto, previously known as Meanwhile Insurance Bitcoin, was also among the participants. The funding will support the expansion of their development team for a new offering.
Data
During Q2 of 2023, four data-focused startups successfully raised $13.5 million.
Subgraph and blockchain indexing platform Satsuma raised $5 million raised in a seed round co-led by Initialized Capital and Archetype, with contributions from OpenSea, Y Combinator, Homebrew, and South Park Commons.
Digital assets data and analytics provider PYOR received $4 million secured in a seed funding round led by Castle Island Ventures. Backers included Hash3, Antler, Future Perfect Ventures, Force Ventures, CoinSwitch Ventures, Coinbase Ventures, and Balaji Srinivasan. The capital will support team expansion.
Funding
Delphi Labs , the web3 acceleration wing of Delphi Digital, received $13.5 million raised from P2P Validator and Jump Crypto. The funds will focus on developing an accelerator that nurtures teams looking to launch web3 initiatives.
Metaverse
In the second quarter of this year, three metaverse startups secured a collective $11 million.
It's important to recognize that investor interest in metaverse projects has waned significantly. In Q2, these companies accumulated $13 million, whereas in 2022, the category attracted a staggering raised total of $450 million. The industry peaked in the latter half of 2022 and has seen a steady decline in investor enthusiasm since then.
AI-enhanced social metaverse firm Social Future received $6 million raised from SNZ, Everest Venture Group, Folius Ventures, Y2Z Ventures, Mask Network, Tess Ventures, Stratified Capital, and Mindfulness Capital. Several strategic investment funds backed by public companies also joined the round. The startup is working on \"MAY\" – \"Meet Another You,\" a platform that facilitates immersive social interactions through personalized avatars.
CEBG Game , a developer specializing in anime MOBA and battle royale experiences, received $3 million from Hashkey Capital, GSR Ventures, KuCoin Ventures, A&T Capital, YouBi Capital, SNZ Holding, BitFury Capital, and Kernel Ventures.
A Singapore-based metaverse company called GoodGang Labs received $2 million from Kakao Investment. The startup is focused on creating a communication platform and technology specifically for avatars.
Media
Web3-centric media firm Blockworks received $12 million raised in a funding round led by 10T Holdings, with backing from Framework Ventures and Santiago R. Santos among others. The funding is intended to enhance their research capabilities and expand their global reach.
Education
An alternative educational initiative, TinyTap received $8.5 million raised from prominent investors including Sequoia China, Shima Capital, Polygon, Liberty City Ventures, Kingsway Capital, and GameFi Ventures. This service, which is community-driven and empowering teachers, will use the funds to grow its team and refine its offerings.
Wallet
Provider of hardware wallet solutions, Tangem AG received $8 million from Shima Capital, aiming to broaden its product portfolio to strengthen its standing in the hardware wallet marketplace.
Marketing
In Q2 2023, two startups in the marketing sector secured investment, leading the industry to accumulate a total of $8 million.
Absolute Labs , a wallet relationship management platform, raised $8 million garnered in a seed funding round, with contributions from Aglaé Ventures, Near Foundation, Alpha Praetorian Capital, TLF Ventures, MoonPay, Plassa Capital, Punja Global Ventures, Samsung Next, W3i, and Animoca Brands’ Sparkle Ventures. The company is focused on creating marketing software tailored for the web3 ecosystem.
Betting
FARE Protocol raised $6.2 million from a seed round led by Goat Capital and C Squared Ventures, with other investors including 6th Man Ventures, Arrington Capital, Eniac Ventures, Spark Digital Capital, Morningstar Ventures, Quantstamp, and DWeb3. Their ecosystem leverages probability smart contracts that activate based on transparent on-chain events determined by probability variables.
AI
In Q2 2023, three web3 AI-oriented startups raised a total of $11.3 million. In contrast, the AI category garnered $36 million throughout 2022. Although the figures might seem underwhelming compared to the surge of interest in AI tools and applications, it's crucial to remember that most AI companies, such as OpenAI, don’t fit within the web3 framework.
AI-powered cryptocurrency search engine Kaito raised $5.5 million was raised during a Series A funding round, spearheaded by Superscrypt and Spartan.
A platform marrying AI with blockchain technology, referred to as AiONE received $3 million was secured in a private token sale, with the startup’s token debuting on the BNB Smart Chain network.
Introducing Orbofi AI , a generative AI framework designed for web3, gaming, applications, media, and online communities. raised $2.8 million was raised through both private and public token sales, with notable participation from Cogitent Ventures, OIG Capital, CSP DAO, Zephyrus Capital, and Halvings Capital. This fresh capital will bolster their engineering and expansion teams and expedite progress within the web3 sector. The startup also envisions launching a mobile application, set to release in the third quarter of 2023.
Development
Compared to the first quarter of 2023, when the development sector experienced absent In the second quarter, five startups focused on web3 development collectively gathered $19.9 million.
Informal Systems raised The company secured $5.3 million in funding, led by CCMC Global, with contributions from Nascent, DWeb3 Capital, and Maven11. These funds will concentrate on growing its security auditing capabilities.
Web3 infrastructure innovator Startale Labs raised $3.5 million was raised in a Seed round organized by the tech giant Sony. Notably, Jun Watanabe, the President and Representative Director of Sony Network Communications Inc., has been appointed as a director at Startale Labs as part of this collaboration.
Introducing Sort , a platform for developing web3 UI components. raised $3.5 million was secured in a Seed round that was co-led by Lemniscap and The General Partnership. The startup intends to use this investment to broaden its product range and enhance its team.
Research
During the second quarter of 2023, venture capital firms and angel investors funded three research-oriented startups, raising a combined total of $11.1 million.
The tokenized social network known as ResearchHub raised $5 million was raised in a Series A round, led by Joseph Jacks of OSS Capital, with other noteworthy investors including Boost VC, RedHat’s Bob Young, Vercel’s Guillermo Rauch, Replit’s Amjad Masad, and Y Combinator’s Garry Tan. ResearchHub is focused on enabling scientists to monetize their work, and plans to utilize these funds to enhance its platform, developing advanced tools and features while reaching out to more scientists globally.
An online collective for life science research, LabDAO raised $3.6 million was raised in a round co-led by Village Global and inflection.xyz . Other investors included North Island Ventures, Seed Club Ventures, ID Theory, Road Capital, Curve Labs, gmjp.lol, Molecule, Gnosis DAO, The LAO, Orange DAO, Beaker DAO, Spaceship DAO, and Balaji Srinivasan, with the goal of decentralizing drug discovery.
Security
CAT Labs raised $4.3 million was raised in a Pre-seed round led by Castle Island Ventures, Brevan Howard Digital, CMT Digital, and RW3 Ventures. It received support from Newark Venture Partners, Hash3, Borderless Capital, Cryptoverse Ventures, and Outshine Ventures. The startup is in the process of developing cybersecurity solutions aimed at tackling crypto-related crimes.
Communication
In Q2, three communications-focused startups attracted a total of $9.8 million.
Web3 notification system Yoz Labs raised $3.5 million was raised in a round led by Electric Capital, with additional participation from Collab+Currency, Dapper Labs, Coinbase Ventures, Form Capital, North Island, Mike Krieger, and Naval Ravikant. This startup will continue enhancing its scalable messaging framework, designed to allow developers to deliver real-time on-chain notifications to users.
APIs
The AI-driven web3 developer platform Airstack raised $4 million was raised in an extended Pre-seed round spearheaded by Superscrypt, backed by Hashed, NGC Ventures, Prima Capital, UOB Venture, Signum Capital, Artichoke Capital, WWVentures, Cypher Capital, Cyber Network, Peridon Ventures, WestWave Capital, ACAIA, ODA Capital, LECCA, CoinSwitch, as well as several angel investors.
The platform facilitates fast and straightforward access to on-chain data across diverse projects and blockchains and has recently upgraded its Jam social application.
Bandwidth
Syntropy , a distributed internet routing protocol, raised $4 million was raised in a Post-seed round. This round included participation from Alpha Transform Group, Alphemy Capital, Denali Digital, Saxon Ventures, and FirstBlock Capital. The funds will accelerate the startup's growth and innovation efforts.
Accounting
Entendre Finance , specializing in accounting and bookkeeping solutions for web3 enterprises, raised $4 million was raised in a Seed round, guided by Basis Set. Participation came from Valhalla, Caffeinated, Moonpay, Alumni, MDig, and Alpine.
Kareem Khattab, CEO and founder of Entendre, remarked, “The next 12 to 24 months will be pivotal for the sustainability of blockchain firms and their adopters. It is essential for them to establish enhanced systems and internal controls. Our objective is to onboard as many businesses as we can, ensuring their accounting expenses align with their growth trajectory.”
Trends in NFT
In the second quarter of 2023, a total of 21 NFT projects managed to secure $72,816,000.
Marketplace
The NFT marketplace and aggregator AlienSwap raised $12 million was raised in a Strategic round co-led by NEXT Leader Capital and C² Ventures, with participation from OKX Ventures, Araceae Capital, BIP32 Venture, Hyper10n Capital, Eureka Trading, Mission Street Ventures, Phyrex, and previous Seed round investors. The aim of the funding is to grow its engineering team and innovate NFT liquidity solutions and trading products, alongside increasing investments in NFT infrastructure.
Trading
Tabi , a versatile NFT publishing and trading platform, raised $10 million was secured during an angel funding round, with significant contributions from Animoca Brands, Draper Dragon, Hashkey Capital, Infinity Crypto Ventures, Youbi Capital, Bo Feng from Dragonfly Capital, Riyad AD from Saudi Arabia, and Suji Yan from Mask Network. Tabi plans to direct these resources towards enhancing its gaming ecosystem and establishing an on-chain identity protocol.
Collectibles
NFT project Pudgy Penguins received $9 million was raised in a Seed round led by 1kx, supported by Big Brain Holdings, Kronos Research, Old Fashion Research, CRIT Ventures, and the founders of LayerZero Labs. The organization will invest this capital to broaden its intellectual property portfolio and grow its team.
The perpetual carbon-capture NFT project Ecosapiens raised $3.5 million was raised in a Seed round led by Collab + Currency, featuring investments from crypto influencer gmoney, Shan Aggrawal of Coinbase Ventures, and Ryan Carson of Moonbirds. The allocated funds will support the development of the Ecosapiens marketplace, alongside testing new minting strategies and forming fresh brand partnerships.
Intelligence
NFT analytics platform Mnemonic successfully secured $4 million in a Seed round led by Kinetic, with backing from Sound Ventures, Tribe Capital, Coinbase, IntoTheBlock, and People.ai. The startup aims to utilize this funding to build its B2B API platform, aimed at providing advanced NFT analytics.
Gaming
The NFT entertainment and gaming network Gameta raised $5 million was raised during a Seed round, with investments from Binance Labs, Huobi Ventures, Arcane Capital, Ceras Ventures, StartVC, Cryptocurrencylistings.com Labs, W3Coins, Redline DAO, Definancex, Rana Capital, and Infinity Labs. The goal is to fast-track the development of its gaming ecosystem, NFT arrangements, and tokens, targeting an audience of 20 million users.
Music
The Swedish music platform Anotherblock received $4,347,000 was raised in a round led by Inventure, with backing from Maex Ament of Centrifuge.io and Fedrik Haha of Dune.xyz. Existing investors and Stable Node also took part. The startup strives to make music rights both accessible and democratic.
Minting
NFT-to-product platform Vibe raised $4 million was acquired in a Seed round with investments from Alchemy, Algaé Ventures, and P Nation. This platform enables users to transform non-fungible tokens into applications and products.
Intellectual property
Artifact Labs , dedicated to preserving cultural and historical events on the blockchain, raised $3.25 million was raised in a round led by Blue Pool Capital, with participation from Animoca Ventures. The funding will go towards expanding the team, especially by onboarding new developers.
Noted investors
Sam Altman, CEO of ChatGPT, along with former Stripe executive Lachy Groom, co-led the first Seed round for Meanwhile Insurance Bitcoin, which garnered $19 million in two stages. Altman has previously put money into Context, the creator of 'the first social feed for Ethereum,' and TipTop, a burgeoning finance solution. Groom's investment history includes Context and Entrepreneur First, a platform designed for startup creation from the ground up.
Gradient Ventures also led the second Seed round of Meanwhile Insurance Bitcoin, with a Mountain View-based venture fund’s portfolio that includes noteworthy entities like Spectral and BlockJoy.
Bitkraft Ventures was the main investor in Karate Combat, which successfully raised a total of $18 million .
Bitrakft, a global investment platform, centers on web3, gaming, and immersive tech, with a portfolio that features companies like Epic Games, Avalon, Discord, and Immutable.
DWF Labs During the Strategic round for the web3 gaming ecosystem RACA, $16 million was raised, and the VC firm also acquired an unspecified quantity of RACA tokens as part of the agreement. DWF Labs operates as a digital asset market maker and a multi-stage web3 investment company, maintaining offices in Switzerland, Singapore, the British Virgin Islands, the UAE, South Korea, and Hong Kong. Notable startups like Yield Guild Games, Fetch-AI, and The Open Network (TON) are part of DWF Labs’ portfolio.
Fails
The second quarter of this year felt relatively subdued compared to the first. However, the crypto community still encountered multiple issues, predominantly stemming from security breaches.
In April, a third-party service provider of MetaMask was involved in a data breach, hacked , exposing the personal details of its users. This incident potentially impacted around 7,000 individuals who submitted customer service queries from August 1, 2021, through February 10, 2023.
In June, it was reported that the Twitter account of Mira Murati, OpenAI’s CTO, was hacked $5.5 million was raised in a Series A funding round, with Superscrypt and Spartan taking the lead.
The innovative platform merging AI and blockchain is known as AiONE . hacked AiONE successfully conducted a private token sale, attracting $3 million in funding. Furthermore, its token has been launched on the BNB Smart Chain network.
On June 15, stablecoin USDT depegged Introducing Orbofi AI , a generative AI engine designed for web3, gaming, applications, media, and online communities.
Conclusion
A total of $2.8 million was secured through both private and public token sales, with Cogitent Ventures, OIG Capital, CSP DAO, Zephyrus Capital, and Halvings Capital co-leading the round. These funds will aid in enhancing their engineering and expansion teams, accelerating their initiatives in the web3 realm, including the forthcoming mobile app set to debut in the third quarter of 2023.
Unlike the previous quarter of 2023, wherein development investments were...
During the second quarter, five innovative web3 development startups collectively attracted $19.9 million.
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Disclaimer
In line with the Trust Project guidelines $3.5 million was secured in a Seed round co-led by Lemniscap and The General Partnership. The startup plans to utilize these funds for expanding its product range and team.
