Welcome to Deal Flow Digest!
This is a new monthly newsletter recapping funding rounds in the web3 world.
Why? It may be a bear market, but it’s not a crypto winter. There’s still significant funds waiting to deploy into web3, and we’re tracking it.
Note: If you are not interested in this newsletter please unsubscribe at the bottom of this email. Don’t worry! You’ll continue to receive updates from the Alt Asset Allocation Podcast.
I’m experimenting with the format of this letter, but you can rely on a monthly update from me on what has my attention in the space - perhaps raises at lofty valuations, early-stage demos that have me stoked, or trends I’ve noticed - I’m excited to share.
Let’s dig in.
Top Five Crypto Funding Rounds
Mysten Labs | $300 Million | Series B | 9/8/22
Mysten Labs has closed a $300 million fundraise at a valuation that tops $2 billion. Mysten's $300 million Series B round was led by FTX Ventures, the venture arm of Sam Bankman-Fried's crypto exchange. Other investors in the round include Andreessen Horowitz's a16z Crypto unit — which invested $36 million in Mysten in December last year — as well as Jump Crypto, Apollo, Binance Labs, Franklin Templeton, Coinbase Ventures, Circle Ventures, Lightspeed Venture Partners, Sino Global, Dentsu Ventures, Greenoaks Capital, O’Leary Ventures, and others.
Animoca Brands | $110 Million | 9/8/22
Blockchain gaming platform startup Animoca Brands Corp. Ltd. said it has raised $110 million in new funding to support its mission to deliver digital property rights to users, including creating a new asset class — play-to-earn economies — and a more equitable digital framework. Investors in the round include Boyu Capital, Singapore's Sovereign Wealth Fund Temasek and GGV Capital.
Fortanix | $90 Milion | Series C | 9/15/22
Fortanix® Inc., the data-first multicloud security company and the pioneer of Confidential Computing, announced $90 million in Series C financing bringing the total amount the company has raised to over $122 million. The round was led by the Growth Equity business within Goldman Sachs Asset Management (Goldman Sachs) with participation from GiantLeap Capital as well as the existing investors Foundation Capital, Intel Capital, Neotribe Ventures, and In-Q-Tel. Soumya Rajamani, Vice President at Goldman Sachs, will join Fortanix's board of directors.
Fuel Labs | $80 Million | 9/6/22
Fuel Labs announced $80M USD of support led by Blockchain Capital and Stratos Technologies, with additional support from Alameda Research, CoinFund, Bain Capital Crypto, TRGC, Maven 11 Capital, Blockwall, Spartan, Dialectic, and ZMT.
Strike | $80 Million | 9/27/22
The Chicago-based company announced a $80 million raise to break what its CEO Jack Mallers calls the "monopolistic, anti-American" dominance of the credit card firms. The funding round was led by Ten31 and joined by new investors Washington University in St. Louis Endowment and University of Wyoming Endowment.
Click to see all of September’s funding rounds here:
Hackathons
Upcoming
$300K+ in prizes right before DevCon in Colombia this year.
TRON Grand Hackathon — Season 3
The TRON ecosystem if awarding $1.2 million in USDD for various bounties. There are currently 253 participants, with submissions open until November 14th.
Near is awarding $1 million for various bounties that advance the Near ecosystem by November 21st
The EOS Network foundation is sponsoring a pitch competition with $125,000 in prizes. Pitch submissions required by October 31st.
Recent Finalists
YCombinator Demo Day (7-Sep) - Link
Solana Summer Camp Finalists (14-Sep) - Link
EthGlobal Online Finalists (28-Sep) - Link
Upcoming Demo Days
Techstars Web3 Alumni Demo Day — October 5th (Just finished)— Register here
Algorand Miami Accelerator Demo Day — October 27th — Register here
Trend Time: Massive Alt L1 Valuations
Institutional capital has valued the companies behind new smart contract chains Aptos Labs and Mysten Labs at over 2 billion dollars each.
These ostensibly identical firms rose out of the ashes of Meta’s canned blockchain project Diem to utilize the custom programing language developed for the project. Aptos brought their funds raised this year to $350 million in July, while Mysten Labs announced a $300 million Series B round earlier this month. The rounds felt almost as similar as the companies themselves: both were led by FTX’s venture arm, and had shared participation by a16z, Jump Crypto, Circle, Apollo Global Management, and Franklin Templeton Investments.
The issue: neither have a public network yet.
Investors seem to be betting on the fact that other L1s with huge VC backing have hit massive valuations with liquid exits for early investors. If these new projects could sniff at market caps of other alt chain projects like Solana ($11 billion market cap), Polygon ($6 billion), and Avalanche ($5 billion) investors could see a 2-6X return. This estimate is likely conservative if market conditions improve, and in the best case scenario, Mysten or Aptos could catch a popular tailwind similar to Solana Summer — remember the days when Solana hit $78 billion in November?
What remains to be seen is how users will benefit from both these chains and their massive backing. I expect there to be multiple opportunities with high, short term returns early on in the life of these chains as VC money and new native tokens get spent to attract TVL and users. These sister projects worth following, and could potentially be the new heavyweights in an already crowded field.
What’d you think? Send me your comments / feedback and otherwise - See you next month!
Enjoyed it? Please share it with a friend, thanks for your time!
Good luck out there!
Ben