According to Bloomberg News, many double-takes are being done these days by those investors that find cryptocurrency startups appealing.
More about the lofty valuation
Despite a lot of market angst, the industry is continuing to attract venture capital, luring approximately $5 billion in the very first quarter, which is twice in comparison a year earlier, as per data that PitchBook Data Inc. has compiled; however, few lofty valuations of newer firms, some of which are less than one year old are posing some potential a pause.
However, an alarm was rung by well-known investors like SoftBank Group Corp. and Sequoia Capital as the cost of cryptocurrencies and technology stocks plunged. Blockchain Capital LLC, which has carried out 130 deals so far since it was established in 2013, late, passed on a deal following the asking price of the startup was five folds in comparison to the “walk away” cost.
According to John Robert Reed, Multicoin Capital Partner, a slowdown in deal activities is the norm for the summer; however, he also accepts that there has been a shift in the dynamics of the market. Multicoin has completed as many as 36 deals since 2017, and Dune Analytics and Bakkt are included in the company’s portfolio.
A shift is also underway for the company Pantera Capital which has backed as many as 90 blockchain companies.
Bloomberg News reports that some venture capitalists seem to be more upbeat regarding their prospects and imply activity in the last couple of weeks. Near Protocol raised $350 million, and the blockchain developer recorded more than twice compared to what it received in January. NFT or non-fungible tokens, project Bored Ape Yacht Club has raised $450 million in a seed round investment that has pushed its valuation to $4 billion. This project has not yet been completed in one year.
Shan Aggarwal, the head of corporate development and ventures associated with the cryptocurrency exchange Coinbase, stated that the investment pace into the cryptocurrency continues to be strong. He also said that the company’s decisions related to the investment had been market agnostic.
Bloomberg News reports that the volatility of the cryptocurrency market has not stopped investors from putting their money into it as compared to what they did in the previous cycles. As per the venture capitalists, this is a sign that the market is gradually maturing. According to data that PitchBook has compiled, Coinbase Ventures is one of the most active investors in the industry. As per the crypto exchange operator, the company revealed in January that it had concluded as many as 150 deals in 2021 alone, constating about 90% of the transactions since it was set up just four years ago.
