Crypto Bull Run Spikes Number of Web3-Focussed Funds as Startups Swarm for Funding, Guidance

The crypto market valuation, for the first time since 2021, is close to its last all-time high of $3 trillion thanks to Bitcoin, ETH, and other cryptocurrencies undergoing a bull run. Startups looking to establish their name in the crypto sector are taking this bull phase seriously and are swarming towards accelerator programmes. Subsequently, the number of fund pools to financially aid early-stage Web3 startups have also risen in number over the last few weeks.

In a symbiotic relationship, accelerator and investment programmes provide Web3 startups with funding, mentorship, and industry guidance from experts – whereas these venture firms get the opportunity to have promising upcoming firms under their umbrellas.

Investment firm Andreessen Horowitz (a16z) was among the first whistleblowers to highlight the swarming of crypto firms towards accelerators programmes. In the last week of March, the venture firm that claims to have over $35 billion in assets – released a list of 25 Web3 startups that have gathered in London to be part of its Crypto Startup Accelerator Spring 2024 program (CSX).

After deliberating which startups to bet on, a16z shortlisted the 25 startups from eight different countries that include Israel, Japan, Poland, Romania, Switzerland, UAE, the UK, and the US.

“The founders of these 25 companies have an ambitious vision paired with the drive and talent to advance core sectors of the crypto ecosystem, including infrastructure, consumer apps, DeFi, payments, games, dev tools, and DePIN,” Jason Rosenthal, the Operating Partner and Head of Crypto Startup School at a16z's crypto initiative published in a post on X along with the names of the selected startups and their fields of expertise.

Over the course of ten weeks, this programme from a16z will provide the startups with industry-specific resources and mentorship along with giving them a common ground for exploring collaborations with each other.

At present, the crypto market valuation stands at $2.67 trillion (roughly Rs. 2,22,68,721 crore). Bitcoin, which touched its new all-time high of $73,000 (roughly 60.8 lakh) in March – is estimated by many, including financial mammoths like Standard Chartered, to soon reach the price mark of $100,000 (roughly Rs. 83 lakh).

The use-cases of blockchains are also on a boom. Blockchains like Solana, Ethereum, and now Bitcoin are roping in newer Web3 projects everyday offering better security and scalability than Web2 server systems along with better cost effectiveness.

Market analysts predict a boom in Web3 activities in the near future, banking on which, more investment firms are launching investment and mentorship programmes for Web3-specific projects.

A group of venture capital firms like Pantera Capital, CoinFund, Spartan Capital and Sfermion have joined web3 gaming infra provider Helika in launching the Helika Accelerator programme last week.

"With total VC investment in Web3 gaming for 2023 estimated to be about $2.3B, this vertical is poised for colossal growth in 2024,” Anton Umnov, co-founder and CEO of Helika said in a statement.

Through this programme, startups developing blockchain gaming with elements of metaverse, NFTs, and cryptocurrencies can avail studios and a suite of tools for enhancing user acquisition, engagement, retention, and growth. Industry players will also educate selected startups in tokenomics expertise, chain selection, data analytics, marketing, and AI game management.

Web3 venture capital firm Hack VC is another platform to have launched a hefty funding of $150 million (roughly Rs. 1,250 crore) to pour it in young crypto and AI firms.

This increase in accelerator and investment programmes focussed on Web3 come as quite the relief for startups hoping to enter this arena. In 2022, as the world stepped into the post-Coronavirus era, banks in several parts of the world resorted to interest rate hikes to keep their economies from entering the inflation phase. That is when the crypto sector, like many others, underwent a funding winter. The situation is gradually changing.

Venture funding for crypto-related companies in the fourth quarter of 2023 amounted to $1.9 billion, as per data by PitchBook.