Coinbase Venture Funding Down 34% In Q2 2022

Zinger Key Points
  • Coinbase Ventures deal activity down 34% QoQ
  • Where CeFi lenders faltered this year, DeFi platforms were resilient

Crypto venture funding, which saw a record Q1 in 2022, witnessed the deal pace of Coinbase Ventures slow down in the second quarter, with the total count decreasing 34%, from 71 to 47.

According to data released by The Block, venture funding in the blockchain sector declined 22%, from $12.5 billion to $9.8 billion. Before this decrease, investment had increased for seven consecutive quarters.

A quarterly investment report released by Coinbase Ventures shows that despite the slowdown compared to the fervent pace of late 21 and Q1 22, its Q2 activity still increased 68% YoY, indicating an overall growth of its venture practice.

Volatility caused decline in funding

The decline in venture funding activity was attributed to the volatility in markets that saw many founders rethink or put their rounds on pause, particularly at the later stages.

“We’re seeing that many companies are foregoing a fundraise unless absolutely necessary, and even then, only if they feel confident that they can show the growth needed to justify a new round,” the investing arm of Coinbase said.

Also Read: Here's What World's Richest Crypto Billionaire Has To Say About Tesla Dumping Bitcoin

Web3 gaming will onboard next wave of crypto users

Coinbase Ventures, despite the gloomy macro environment, continued to invest in projects with real utility, as shown in its focus on Web3/protocol infrastructure and Platform&Developer Tool, accounting for 38% and 21% of its total investment, respectively.

"With an estimated 3.2B+ gamers in the world, we strongly believe that Web3 gaming will make onboarding the next massive wave of crypto users. Web3 gaming remained a sector of heavy investment in Q2, with The Block estimating that $2.6B+ was raised," Coinbase Ventures stated.

CeFi Vs DeFi

The report noted that while centralized lenders indulged in opaque practices, and misused investors' funds resulting in their insolvency, the entities brought down the whole crypto markets.

In contrast, blue chip DeFi lenders Aave AAVE/USD, Compound COMP/USD, and MakerDAO operated without a hitch and every loan and its terms remained transparently on-chain for all to see.  

“As in previous downturns, detractors are once again confidently pronouncing crypto dead. However, from our seat in the industry, we’re invigorated by the brilliant founders we see working tirelessly to move this technology forward. As the entire financial system and world digitizes itself, we remain convinced that the opportunity within crypto and Web3 is far greater than most realize,” the report stated.

Posted In: Crypto Currencycrypto-currencycryptocurrenciesWeb 3Web 3.0CryptocurrencyMarkets

Ad Disclosure: The rate information is obtained by Bankrate from the listed institutions. Bankrate cannot guaranty the accuracy or availability of any rates shown above. Institutions may have different rates on their own websites than those posted on The listings that appear on this page are from companies from which this website receives compensation, which may impact how, where, and in what order products appear. This table does not include all companies or all available products.

All rates are subject to change without notice and may vary depending on location. These quotes are from banks, thrifts, and credit unions, some of whom have paid for a link to their own Web site where you can find additional information. Those with a paid link are our Advertisers. Those without a paid link are listings we obtain to improve the consumer shopping experience and are not Advertisers. To receive the rate from an Advertiser, please identify yourself as a Bankrate customer. Bank and thrift deposits are insured by the Federal Deposit Insurance Corp. Credit union deposits are insured by the National Credit Union Administration.

Consumer Satisfaction: Bankrate attempts to verify the accuracy and availability of its Advertisers' terms through its quality assurance process and requires Advertisers to agree to our Terms and Conditions and to adhere to our Quality Control Program. If you believe that you have received an inaccurate quote or are otherwise not satisfied with the services provided to you by the institution you choose, please click here.

Rate collection and criteria: Click here for more information on rate collection and criteria.