Gm!
Please enjoy the March 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).
March’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.
Memecoins & Speculation
The juxtaposition of crypto never ceases to amaze me.
On one side, we have massive institutional flows in the BTC ETF - suddenly reaching a threshold of institutional adoption and understanding that this is an asset class for a diversified portfolio.
Then, we have the degenerate meme coin casino happening within the rest of crypto.
Memecoins.
Everyone is talking about it. Everyone is getting hilariously rich and you’re not.
As someone who cares deeply about this space, it’s sometimes depressing. Depressingly, what if nobody cares about the tech and they’re only searching for the next 50x opportunity?
Why do memecoins take off? The lighter side explanation is that crypto is “internet culture.” 4chan culture, Reddit people - these memes are very nostalgic and it’s deeply rooted in our internet meme culture and chronically online culture. Of course, we love the memes.
The darker side is Financial Nihilism. This has been something I’ve chatted with others about, but Travis Kling really nailed it with his Twitter thread & follow-up post. Basically, if you’re a young person today, things may seem dire. It’s “impossible to afford a home”, it’s “impossible to get by and afford life.”
Want to see a chart that perfectly characterizes this “I give up” / FInancial Nihilism attitude? For the US (which looks very similar globally), look at median home price to median household income. It feels more impossible than ever to get the “American Dream” and own a house.
Gambling in general is skewing up. The Super Bowl this year had the highest amount of betting of any Super Bowl. Ever. Gambling revenue is literally up only.
So people are gambling more in general, then with crypto you have this global, open, permissionless, 24/7, fast-moving, hyper-financialized unregulated market that can fulfill your every hope and dream of “making it.” Why wouldn’t you bet $100 on some memecoin and have a chance to “escape the 9 to 5.” This doesn’t even include the impact of social media here, which only fans the flames even more (e.g. “everyone is hilariously wealthy, happy, and successful and I’m just stuck here”).
As Travis laid out, Financial Nihlism is driving a lot of this. Memecoins and the more speculative side of crypto will absolutely rip higher because Financial Nihlism will push everyone to gamble more (not only in crypto) just to have a “chance of buying a house.” Ugh. I hate it, but the logic checks out.
It’s ugly out there. Trading attention. Hyper-financialization. Exhausting at times, yes. But, lumping the “speculation on memecoins bad” is a little naive. Is speculation that bad?
On one side, Speculation is the lifeblood of markets in general. And speculation and hyper-financialization are the primary and most fundamental use case of cryptocurrencies. Birthed from the ashes of the Financial Recession in 2008, it’s deeply ingrained in the culture.
And if speculation is bad, outside of memecoins, the biggest part of the crypto markets today (dare I say “PMF”) is DeFi - namely Trading, Perpetuals, and Derivatives. Not “gambling” per say, but it’s absolutely speculation and people taking bets about future possibilities.
So no, we can’t write off memecoins (and speculation). Crypto provides the best capital formation engine the world has ever seen. Crypto is an open, permissionless, and unstoppable financial market. People can spend their money on what they want. They can do what they want with it and don’t need any approval to do it. This is the whole point.
That’s not to say i don’t wish some of this attention and energy could be directed at something with a greater impact the world around us, as Vitalik mentioned in his blog yesterday about… memecoins.
“I think of the "degen" parts of the crypto space in the same way. I have zero enthusiasm for coins named after totalitarian political movements, scams, rugpulls or anything that feels exciting in month N but leaves everyone upset in month N+1. At the same time, I value people's desire to have fun, and I would rather the crypto space somehow swim with this current rather than against it. And so I want to see higher quality fun projects that contribute positively to the ecosystem and the world around them (and not just by "bringing in users") get more mindshare. At the least, more good memecoins than bad ones, ideally those that support public goods instead of just enriching insiders and creators. But also ideally, making games rather than coins, and making projects that people enjoy participating in.”
Top Ten Crypto Funding Rounds
Optimism | $89M | Private Round | 3/08/2024
Optimism Foundation in early March said that it had entered into a private token sale of approximately 19.5 million OP tokens, worth nearly $90 million at current prices, to an undisclosed buyer. The foundation is one of the maintainers and developers of the Optimism network, a blockchain that runs and settles transactions on Ethereum.
Zama | $73M | Series A | 3/07/2024
Cryptography Firm Zama Raises $73M for 'Fully Homomorphic Encryption' Apps. The funding round was led by Multicoin Capital and Protocol Labs and included participation from Solana co-founder Anatoly Yakovenko and Ethereum and Polkadot co-founder Gavin Wood. The 'FHE' technology allows for processing of encrypted data, useful for privacy in blockchain and AI.
Berachain | $69M | 3/15/2024
DeFi-Focused Layer 1 Berachain Raises $42M Series A at $420.69M Valuation. The round was led by Polychain Capital and included participation from venture capital firms Hack VC, dao5, Tribe Capital, Shima Capital, CitizenX and Robot Ventures.
Figure Markets | $60M | Series A | 3/18/2024
Figure raises $60M in bid to build a ‘differentiated’ crypto exchange. After the capital infusion led by Jump Crypto, Pantera Capital and Lightspeed Faction, Figure also seeks to offer a registered security alternative to stablecoins.
Succinct Labs | $55M | Series A | 3/21/2024
San Francisco-based startup Succinct Labs has completed a new funding round, raising $55 million. The round was led by Paradigm, with participation from Robot Ventures, Bankless Ventures, Geometry, ZK Validator, Polygon co-founder Sandeep Nailwal, Daniel Lubarov, and EigenLayer founder Sreeram Kannan.
Eclipse | $50M | Series A | 3/11/2024
Eclipse Labs, the company building a blockchain to scale Ethereum using parts from Solana, raised $50 million ahead of its mainnet debut, which should come within weeks. Eclipse seeks to use a mix of technology from Solana, Celestia, Ethereum and RISC Zero for its proposed scaling solution – basically, speed like Solana with security provided by Ethereum. Apps built for Solana will be able to run on Eclipse with minimal changes, with SOL being the token of the realm.
0G Labs | $35M | Pre-seed Round | 3/26/2024
Web3 modular infrastructure firm 0G Labs announced the successful completion of a $35 million pre-seed funding round on March 25. According to a press release from 0G Labs, the round received participation from more than 40 crypto-native institutions, including Hack VC and Blockchain Builders Fund. The funding will be used to build out 0G Labs’ vision of creating a full-stack blockchain-based solution for training, deploying, and running artificial intelligence models.
Parallel | $35M | 3/28/2024
Parallel, the innovative sci-fi NFT card game has completed a new round of funding, raising $35 million from diverse investors. The game, which leverages the Ethereum blockchain and Base layer-2 chain. The investment round drew support from notable entities, including Distributed Global, The Operating Group, VanEck, Solana Ventures, Base Ecosystem Fund, and Amber, among others.
io.net | $30M | Series A | 3/06/2024
IO Research, developer of the Solana -based decentralized physical infrastructure network (DePIN) io.net, has reached a fully diluted token valuation of $1 billion in its latest funding round batch, two sources with direct knowledge of the matter told The Block. IO Research announced on Tuesday that it has raised $30 million in a Series A funding round led by Hack VC, with participation from Multicoin Capital, 6th Man Ventures, Solana Ventures, OKX Ventures, Aptos Labs, Delphi Digital, The Sandbox, Sebastian Borget of The Sandbox and others.
Gunzilla Games | $30M | Strategic | 3/26/2024
Gunzilla Games, a Frankfurt-based gaming studio, has raised $30 million in combined funding to bolster the development of its forthcoming web3 title Off The Grid. This cyberpunk battle royale third-person shooter, alongside Gunz – the studio’s blockchain-based platform – is set to benefit from this influx of capital with increased development resources.
Click to see all of March’s funding rounds here:
March Crypto VC Fund fundraise Announcements
22-March-2024: Crypto Fund Hack VC Looks to Raise Even More Capital for Seed Stage Digital-Asset Bets. Venture capital firms continue to race back into crypto as digital asset prices tick upward after a prolonged decline. In the latest such example of market optimism, Hack VC is raising at least $100 million for another fund that will target seed-stage companies. Hack VC raised a $150 million crypto fund in February.
30-March-2024: 1kx raises $75 million in latest funding round. The investment firm on Thursday completed the first close of a new oversubscribed closed-ended fund, a statement from the company said. The round included participation from Marc's Marc Andreessen and Chris Dixon, as well as Accolade Partners and Galaxy Digital. The firm said that with this recent closing, 1kx has raised $275 million across two funds since the start of the crypto bear market nearly two years ago. The latest funding will be allocated to offering technical support, financial resources and infrastructure assistance to early-stage companies and token networks. This support aims to help these entities attract new users and cater to their communities.
Hackathons
Ongoing
Bonkathon End of Q1 - 2024
$300k Available in prizes.
Upcoming
Scaling Ethereum 2024 April 5 - 26
$125k Available in prizes.
ETH Dubai April 20 - 21
$85.5k Available in prizes.
ETH Global Sydney May 3 - 5
$125k Available in prizes.
Recently Completed (results in links)
ETH Global London March 15 - 17
ETH Vietnam March 13 - 17
ETH Oxford March 8 - 11
That’s a wrap for March.
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