VC funding in January is on track to grow by 100% compared to the same month in 2024. To date, deals amounted to $1.14B, the usual pace for the most recent successful quarter.
Crypto VC deals continued at a higher baseline for the first month of the new year, extending the growth from the last quarter of 2024.
In January, VC funding to date reached $1.14B, on track to post 100% growth compared to January 2024. The data varied based on the inclusion of crypto deals. Funding included a mix of seed rounds and advanced-stage inflows, with undisclosed rounds producing the biggest value.
VC funding returned to normal levels in January, setting the expectation for a more active year. | Source: Cryptorank
For the same period of the past year, VC deals reached $653.30M, reflecting the effect of the prolonged bear market. VC funding has become more selective since then, but the rising tide of crypto led to more months with over $1B in funding. The past year led to a consolidation and refinement of funding as backers tried to choose the most viable projects and were more careful with allocations.
January’s results lag behind December’s outlier funding, where several OTC deals boosted the end result to over $3B. In the last months of the year, several undisclosed or OTC deals added to the inflows.
For crypto and small-scale projects, the metric of small—to medium-range funding was more important, as it showed the level of confidence and enthusiasm for startups. The current level of funding switched back to ‘normal’ levels, with rounds ranging from $1.5M and multiple projects raising between $10M and $25M.
Funding for 2024 was estimated to be between $11.5B and $13.6B, depending on the metrics and the projects counted. For the coming year, optimistic predictions see deals of up to $18B. Other predictions include renewed fundraising efforts by big projects, with predictions for IPO offers coming from leading crypto companies.
OKX Ventures moves in as a top funding participant
The past month to date achieved 121 funding rounds, with OKX Ventures leading the way. The fund took part in 10 projects. Folius Ventures was second, with eight funding rounds.
The usual leader, Animoca Brands, slowed down and only opened the year with six new funding rounds. The Tier 2 fund still participates actively in selecting and supporting Web3 projects.
Andreessen Horowitz and Sequoia Capital led the biggest funding round for the month, raising $150M for the Phantom wallet. The round reflected the increased interest in the Solana ecosystem, with Phantom as its most common tool for mass onboarding new users.
The interest of funds reflected the recent rise in AI technology. 27.59% of the deals went to projects with AI-based products or plans, and more than 25% of funding was allocated to developer tools. Other hot investment topics included payments, DEX, and data services.
January funding managed to go above $1B, after a month of outlier OTC deals in December. | Source: Cryptorank
VC funding is also viewed with skepticism for producing more tokens that may be sold on the open market to realize profits. The return of VC funds also speaks of confidence that the crypto market would be liquid enough and enthusiastic enough to absorb the selling.
The expansion of VC projects at the end of 2024 suggested a higher potential to realize profits. VC-backed tokens are still competing with the meme space, where there is no formal need for fundraising, but tokens can enter price discovery within days.
IEO and IDO funding also picks up
Despite the effect of meme launchpads and AI agent tokens, older tools like ICO and IDO fundraising were also active. PancakeSwap remains the leader in ICO funding, offering a platform for small-scale raises.
Decentralized sales even surpassed VC rounds, raising $1.33B. In January, activity picked up with 205 fundraising events. The trend from the last quarter of 2024 continued, with January setting a new local high. Token sales for new projects are more diverse, often raising small rounds to bootstrap new Web3 features.
Ethereum was still a leader in fundraising, with more than $575M in token sales. Solana was second, with $343M. Initial Decentralized Offering through a platform was the most common type of fundraising, taking up to 75% of all deals. More than 21% of projects chose an IEO through an exchange, and ICO, once the leading format, only had a small share.
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