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Crypto funding changed direction in Q4, with much larger rounds adding to the final balance of the year. Previously, a slowdown was seen among early-stage investments.
December’s VC funding reached the highest levels for Q4, extending the trend from October to November. VC funding expansion coincided with ‘Uptober’ and the most dramatic market recovery for the year. December’s funding crossed the $3B mark, driven by late-stage and OTC or undisclosed rounds. The month showed extreme growth compared to December 2023, where rounds were capped at $1B.
Investments expanded by 72% from the previous month, as large-scale private deals were closed in December. | Source: Cryptorank
More than 37.9% of all deals in December were from undisclosed or unannounced categories. Still, around 30% of investors supported seed rounds, showing confidence in the crypto market potential to support a new batch of startups. The last month of the year closes a volatile period, where funding ranged from a minimum of $640.75M in February, to December’s record, with an average of $1B in monthly funding for most of the year.
In December, VC funds set the record for the whole year, as monthly funding returned to levels not seen since the summer of 2022. The current rounds targeted advanced-stage projects, surpassing the share of seed rounds.
More than 26% of all deals went to Ai projects, with activities ranging from rented GPU to chatbots.
VC-backed deals expanded even as communities turned their liquidity to meme tokens. December was relatively active for ICO and IDO services, with $68.22M raised for the past month, a slight decrease from November.
December investment included high-rate deals and undisclosed OTC rounds
Investment volume is up more than 72% from the previous month, bringing a strong close to 2024. The biggest deal for the month was a $250M private late-stage round for Avalanche.
December ended with 167 rounds in total, with most deals in the early seed stage. However, the large number of $3M to $10M deals was offset by several outliers and deals that were external to the crypto space. When it came to small rounds, Animoca Brands was still the leader with 109 deals in the past 30 days. OKX Ventures followed with 84 deals.
In December, the Tether deal with Rumble, valued at $775M, was counted toward total funding, though it was not representative of overall VC sentiment. ALLO was another deal that locked in $100M through debt financing, not constrained by VC’s readiness to invest. CleanSpark and RIOT issued post-ICO debt. The past month also saw multiple OTC deals of undisclosed size in a year-end funding frenzy.
US investment drove VC funding in 2024
Most of the VC deals were tied to US startups, and came from US-based funds. One of the reasons for the accelerated funding in November and December was the US election result, which pointed to an upcoming crypto-friendly administration in the USA.
Other countries with an active VC climate included Singapore, the United Kingdom, China, and the UAE. Germany was the leader among EU countries, with more than $101M in deals for the past year.
The previous years of regulatory oversight saw the US Securities and Exchange Commission essentially punish crypto startups with protracted lawsuits, which discouraged investment.
Angel investors also set the trend for picking up AI projects, followed by DeFi, infrastructure, DEX, and another attempt at funding NFT projects. Some angel investors are also betting on L1 and L2 infrastructure, as there is still competition between chains.
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