While there is much discussion about the broader crypto venture market’s rather sharp decline in 2023, there is little discussion around the growth of the early stage bitcoin-native in the past few years. Many of these startups have been quietly building bitcoin payments infrastructure that has the potential to disrupt the global financial landscape.
Today, Trammell Venture Partners, an Austin-based venture capital firm, has announced the second annual results of its proprietary research from 2021 to 2023 on the early growth of the bitcoin-native startup and venture capital ecosystem.
TVP launched the venture industry’s first dedicated bitcoin-native fund series in 2021, which aims to support the institutionalization of venture investment for this emerging growth category within crypto and blockchain venture capital.
Currently, these are the only reports published on bitcoin-native ventures specifically. The expectation is that more reports will come out as the bitcoin-native sector continues to grow.
Research Parameters
For this research, TVP have included in the dataset bitcoin-native, early-stage startup companies and have excluded bitcoin mining companies due to their capital intensive nature and tendency toward project finance-like profile compared to predominantly software companies included in the dataset.
Bitcoin
The Key Findings
- Despite the sharp decline in crypto venture market investment in 2023, the Bitcoin startup sector had a breakout year at the Pre-Seed stage, with a 360% year-over-year increase in transaction count.
- During this period, the total bitcoin-native startups that have been funded has increased by 56.9%.
- In the broader startup sector, 2023 exit activity reached a more than 10-year low, leading to a lower total number of venture deals for the second consecutive year. Crypto venture deal count specifically was down significantly in 2023 by 35.3%.
- Yet despite this backdrop, Bitcoin-native as a category grew in 2023, up 69.2% year-over-year.
- Early-stage, Bitcoin-native startups raised just under $1 billion year over year, with a significant wave of venture-backed, Pre-Seed companies seeking product-market fit.
- The total capital raised by bitcoin-startups declined by 12.5% compared to the crypto venture dollars invested, which declined by 64.5% during the same period.
“The early indicators from the TVP research are in line with the expectations we have had for ‘crypto’ venture’s end state: founders really want to be building on bitcoin specifically,” said Christopher Calicott, TVP’s managing director and a founding partner.
These indicators from the TVP research are in line with the expectations we have had for ‘crypto’ venture’s end state: founders really want to be building on bitcoin specifically. With a rapidly growing array of tech enablements fueling enhanced scalability and the ease of building on bitcoin, the long-held TVP hypothesis is becoming an evidence and data-supported reality.
