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Venture capital investments in crypto start-ups continue to increase in volume and amount invested. Coinbase Ventures (CBV), the venture capital arm of Coinbase, says that despite the market downturn, the crypto venture capital space made record-breaking investments during Q1 of 2022.
Coinbase Ventures highlights its investments in Q1
In a blog post, CBV revealed that during Q1 it made a new record high of 71 VC deals across the crypto economy. In total, all crypto venture capital firms invested a record of $12.5 billion during the quarter the report corroborated.
However, CBV noted that it was picking up a slow down in investment activity, especially in late-stage investments. CBV itself made the majority of its 71 investments in early-stage funding rounds. However, the firm hopes to pick up more late-stage start-ups in Q2.
Coinbase Ventures was busy as well, closing 71 new deals in Q1, generally targeting early stage investments. We will note that we’re starting to see signs of a slow down, particularly with later stage investments, the post said.
The post also gave a breakdown of CBV’s investment playbook during Q1. Broken into six categories, CBV made the most investments in web 3 platforms or platform infrastructure (32%) start-ups.
NFT metaverse start-ups got 28%, DeFi start-ups saw 23%, CeFi start-ups saw 10%, cloud/developer tools start-ups saw 6%, while other miscellaneous start-ups made up 1% of Coinbase Venture’s Q1 investment distribution.
CBV’s outlook for crypto VC investment in 2022
The subsidiary of the largest crypto exchange by volume in the US remains highly bullish on the prospect of many more venture capital firms starting to enter the crypto space. This is one reason that CBV does not plan to change its investment strategy.
Regardless of whether there is a market downturn, CBV is also confident that there will always be high-quality innovative start-ups springing up in the crypto economy. It holds that bear markets are the best time to invest in crypto start-ups, as exemplified by the success of projects that were funded during the 2018/19 market.
CBV is not alone in sharing this stance as other crypto VC firms have shown by their massive investments in the industry. According to a report, SEC filings made by the industry’s top investors including Paradigm, Andreessen Horowitz, and Sequoia disclosed a marked increase in their assets under management.
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