Gm!
Please enjoy the January Deal Flow Digest, a monthly newsletter recapping recent Crypto / web3 funding rounds.
Be sure to check out the Airtable below with ALL the deals, and the recent hackathon/demo day results (in the links).
January’s Deal Flow Digest is brought to you by The Rodman Law Group.
The Rodman Law Group combines top-tier EC/VC legal representation with an unmatched operational understanding of blockchain and digital assets. Whether you're forming, fundraising, or deploying capital, our team delivers swift, strategic, and cost-efficient legal advice. Trust us to align with your vision and propel your Web3 venture forward.
2024 Predictions Aggregation
People love to forecast.
I love reading forecasts. Love it.
So every year, I end up reading a bunch of Predictions.
Fortunately, I’ve aggregated them all here for you:
The link: https://docsend.com/view/himqstekxq5zi35f
Note that there is a link to each individual report in the last row of each column.
Most people are bullish.
Bullish on crypto, bullish on institutional adoption (via BTC ETF, then likely ETH ETF)... it feels “consensus” that 2024 will be a good year for crypto.
Yes, this is a subset of very much crypto-native firms, but whenever everyone agrees that “it’s a bull market” the market has… a tendency to inflict pain.
I’m bullish too. At times it’s easier to predict where we’re going, but it’s much harder to predict when it’ll happen.
I agree we will likely be in a good spot at EOY’24 - both in terms of price and working through the backlog of building and shipping… But, maybe over we’re a bit over our skis? Is sentiment is too good relative to what has happened? BTC ETF inflows likely aren’t linear at $1B in inflows each year. What catalyst brings in retail again?
People tend to OVER estimate what will happen in 2 years and UNDER estimate what will happen in 10 years. Things don’t go up in a straight line.
You can scroll through the summary and the individual reports, but common trends observed in predictions would include being pretty bullish on:
Bitcoin
Bitcoin DeFi (L2s, Ordinals, etc.)
DePin
Solana
Restaking (e.g. EigenLayer)
Crypto x AI (e.g. Vitalik’s new article)
Stablecoins / CBDCs (below)
Keep in mind: the consensus is normally wrong and doesn’t lead to outperformance. People don’t have a crystal ball.
Stable Coins / Central Bank Digital Currencies (CBDCs)
A clear trend that’s been clear that’s mentioned in many of the predictions — Stable Coins. Specifically: Central Bank Digital Currencies (CBDCs).
Setting the stage: Did you know that in Indonesia, more individuals own some type of cryptocurrency (~18.2M) versus owning equities (~11.28M)?
In 2023, over 40 countries globally, including several G20 nations, discussed or implemented crypto-focused regulations and legislation. The initiatives encompassed various aspects like stablecoin regulation, compliance with the Financial Action Task Force's travel rule, licensing, and crypto framework development.
We all know China has a digital central bank, digital currency, and the digital yuan, and they've been pushing it to their 1.4B population. They have millions and millions of people using it, billions of yuan transactions on it, and they're beginning to talk to other countries around the world about doing their trade in digital yuan rather than the digital dollar. That’s a lot.
Who else is going to launch their pilots in 2024? Another 2.2B people in India, Brazil, Russia, Indonesia, Nigeria, and Malaysia.
So, in 2024 ~3.6B people will be told by their government that they need to use digital wallets - digital central bank and digital currencies.
CBDCs and moving toward digital currency opens nearly half the world’s population’s eyes to digital currencies is one-half step closer to uncensorable money such as public cryptocurrencies. Potentially profound.
If you read JUST one? Messari 2024 Crypto Theses is a great one (discussed here).
If listening is more your speed? Some faves:
Predictions are difficult. Nobody has a crystal ball. But where are we going? Nobody knows (except maybe Leo).
Top Eight Crypto Funding Rounds
HashKey Group | $100M | Series A | 1/16/2024
HashKey Group, which operates the Hong Kong-based crypto exchange, has “nearly” met its $100 million fundraising target. HashKey announced the fundraising round in August, shortly after it won a license from Hong Kong’s security regulator to offer retail crypto trading. The firm did not disclose the investors in the round and now has a valuation of $1.2 billion post-raise, giving it a “unicorn” status.
Core Scientific | $55M | Equity Financing | 1/8/2024
Bitcoin miner Core Scientific has closed a $55-million equity financing round as it returns to solvency. According to the Jan. 8 announcement, the $55-million equity offering expired last week and was oversubscribed. “As a result of this successful raise, and following full repayment of previously drawn amounts on our DIP [debtor-in-possession] financing, we are set to emerge from Chapter 11 in January with enhanced liquidity and in a strong position to continue executing our growth plans,” said Core Scientific CEO Adam Sullivan.
MAP Protocol | $50M | Strategic Investment | 1/17/2024
The Alchemy Pay team announced via X that it has made a strategic investment in MAP Protocol, a Bitcoin layer-2 protocol. The investment is to aid MAP Protocol to pioneer the next wave of Bitcoin-based decentralized financial apps and ecosystems. According to the MAP Protocol team, the investment will enable them to boost the DeFi ecosystem on the Bitcoin blockchain.
Canaan | $50M | Equity Financing | 1/26/2024
Crypto mining rig maker Canaan has raised over $50 million through preferred shares financing to enhance its research and development capabilities and expand production scale. The Nasdaq-listed company disclosed in a filing this week that it raised the capital from an institutional investor by issuing and selling up to 125,000 series A convertible preferred shares. The company did not name the investor.
Flowdesk | $50M | Series B | 1/18/2024
Flowdesk, the crypto market maker that recently became a liquidity provider for Grayscale's bitcoin (BTC) exchange-traded fund (ETF), has raised $50 million in a Series B. The investment round was led by venture capital firm Cathay Innovation and included contributions from Cathay Ledger Fund, Ripple, Eurazeo, ISAI, Speedinvest and BPI.
Sygnum | $40M | Strategic | 1/24/2024
Sygnum, a crypto banking group based in Switzerland, closed a $40 million round, which valued the firm at $900 million. “Closing a successful funding round in this macro environment with such strong partners is exciting, and we are thankful for our investors’ trust in us,” Mathias Imbach, Sygnum’s co-founder and CEO, said in a press release on Thursday. “Our strategy to build trust via regulation and good governance has guided us throughout all market cycles.”
Portal | $34M | Seed | 1/30/2024
Portal, a San Francisco-based fintech provider, raised $34 million to support the development of its bitcoin-based decentralized exchange (DEX). Investors in the round included Coinbase Ventures, Arrington Capital, OKX Ventures and Gate.io, according to an announcement. Portal will also use the funding to advance the development of a non-custodial wallet.
Polymer Labs | $23M | Series A | 1/23/2024
Polymer Labs, which is building an Ethereum Layer 2 network to provide interoperability-as-a-service to Ethereum and its rollups, has raised $23 million in a Series A funding round. Blockchain Capital, Maven 11 and Distributed Global co-led the round, with Coinbase Ventures, Placeholder, Digital Currency Group, North Island Ventures and Figment Capital participating, Polymer Labs.
Click to see all of January’s funding rounds here:
Recent VC Fund fundraise Announcements
26-Dec-2023: SCOPE, an exclusive networking platform for startups, unveiled a $45 million venture capital fund targeting fintech and gaming. The move aims to propel innovation in these rapidly evolving industries, emphasizing SCOPE’s dedication to nurturing innovation and collaboration within the startup ecosystem.
Hackathons
Upcoming
Circuit Breaker February 2 - 21
$50,000 Available in prizes. Virtual too!
ETH Cinco De Mayo February 2 - 4
$50,000 Available in prizes.
Bonkathon End of Q1
$300,000 Available in prizes.
Blast Big Bang February 16 - 20
ETH Denver February 23 - March 7
ETH Vietnam March 13 - 17
Recently Completed (results in links)
LFGHO - Hackathon January 12 - 24
Demo Days
Upcoming
2024 Blockchain Conference at Harvard April 13 - 14
Recently Completed
Polkadot Vietnam December 22
Demo Day - India Blockchain Week December 4 to 10
Light Cycle - Web3Port Demo Day December 1
Web3 Futurefi 2023 Summit December 18 - 19
That’s a wrap for January.
Did you enjoy this newsletter or the data? Please share it with a friend, and THANK YOU for your time.
Thank you and good luck out there!
Ben Lakoff, CFA
Twitter: https://twitter.com/benlakoff