Analysis of the top 300 Crypto VCs worldwide: total assets under management of $83.9 billion; already preparing for the bull market.

Original Title: "2023 Crypto VC Directory: Who are the Most Active Among the 300 Cryptocurrency Funds Worldwide?"

Original Author: Ryan Allis, Founder of iContact, Hive, and Coinstack

Translated by: Deep Tide TechFlow

Following the release of the popular 2022 cryptocurrency venture capital company list by Coinstack, a report was produced last week ranking the top 300 cryptocurrency venture capital funds globally. This article will discuss the rankings according to the following categories:

The top cryptocurrency venture capital firms ranked by fund size;

The top cryptocurrency venture capital firms ranked by investment amount;

The top cryptocurrency venture capital firms ranked by investment quantity in the past 12 months.

Let's start with some summary data:

The total capital managed by the top 300 cryptocurrency venture capital firms worldwide is 83.9 billion US dollars.

San Francisco is the largest city for cryptocurrency venture capital firms globally, representing 45.16% of the total capital of the top 50 cryptocurrency venture capital firms worldwide. The next largest cities are New York, Hong Kong, Singapore, Austin, London, and Shanghai.

Even if there is an economic recession in the second half of 2022, 2022 is still the biggest year for cryptocurrency venture capital in history, with over $26.2 billion in new capital invested in companies, compared to $25.1 billion in 2021.

In the fourth quarter of 2022, new cryptocurrency venture capital totaled $2.5 billion, which is 77% lower than the first quarter of 2022 ($11.2 billion). However, we have already passed the turning point and are now moving towards an upward trend.

In February 2023, the venture capital invested in cryptocurrency/blockchain companies by venture capital firms amounted to $872 million, a 52% increase from $574 million in January 2023.

This means that even in the lowest bear market moments, venture capital firms invest over $25 million in cryptocurrency/blockchain company equity every working day (currently investing around $45 million per working day). This doesn't even account for venture capital firms' investments in tokens.

If we look at a broader perspective, it is on par with the same period four years ago (January/February 2019) and is 3.1 times higher than during the previous bear market period, as of the current (January/February 2023) venture capital investment in the company.

Therefore, even though the market is currently in a bearish state, capital flow is still three times that of the previous cycle. The digital asset industry is maturing, and we are seeing more institutional capital staying in this industry. This is a significant event.

Compared with past economic recessions, the cryptocurrency venture capital market not only survived, but is also thriving and preparing for a strong comeback in 2024/2025.

As we prepare for the Bitcoin halving in April 2024 and the potential crypto bull market in 2025, we are entering a turning point in the field of cryptocurrency venture capital. The good times in our industry typically occur once every four years and last for approximately 18 months.

It's time to prepare for the next bull market now.

At some point in time (if history guides me correctly, I expect around December 2024/January 2025), Bitcoin will once again surpass $69,000 and Ethereum will surpass $4,800 - capital allocators in the current sector will look very smart. They will rush in when others flee, realizing that smart contracts, distributed ledgers, always-open markets, and tokenized financial assets are the foundational technologies of the global financial future.

The smartest venture capital firms are betting on the present because valuations are discounted - and amidst market noise, they have been making sustained investments in investment themes such as Web3, Gamefi, DeFi, infrastructure, and DLT.

2023 Cryptocurrency Venture Capital Firm List

Which risk investment companies with a focus on cryptocurrency are the largest? Which ones are most actively investing in the post Terra/Three Arrows/Celsius/FTX events?

According to the fund size, the largest VC companies focused on cryptocurrency are: A16Z Crypto, Binance Labs, Multicoin, Pantera, and Paradigm.

According to the total investment amount in cryptocurrencies, the top five VC companies focused on cryptocurrencies are: Coinbase Ventures, DCG, NGC, AU21, and Animoca.

But in the past 12 months, which companies have been leading in the new cryptocurrency VC investment field?

The most active cryptocurrency companies currently are: Big Brain Holdings, Shima Capital, Infinity Ventures, GSR, and MH Ventures.

Let's delve into the analysis and conduct a comprehensive ranking.

The world's largest cryptocurrency venture capital company divided by fund size

The following table is compiled through our own research and data sources from Pitchbook, Crunchbase, AUM13F, and company websites. When companies invest in areas outside of blockchain/cryptocurrency, we only include investments and funds that are as focused as possible on the cryptocurrency field.

Below are the top 50 companies ranked by fund size. According to our research, 19 cryptocurrency venture capital firms have dedicated $1 billion or more specifically for cryptocurrency investments.

按城市划分的加密风险投资

"Encrypted risk investment divided by city"

The total capital managed by the top 50 cryptocurrency venture capital funds is $59.6 billion. Where are these funds geographically distributed? Let's take a look at the capital allocation based on company headquarters:

The San Francisco Bay Area holds a 45.2% market share in the top 50 global cryptocurrency venture capital firms, managing over $26 billion in capital, nearly equal to the total of other global cities.

The United States dominates the field of cryptocurrency venture capital, at least among the top 50 companies ranked by fund size.

Top 50 Cryptocurrency Venture Capital Firms Ranked by Investment Amount

Now let's rank the top cryptocurrency venture capital firms based on the amount of investment they have made in the cryptocurrency/blockchain industry. This will reveal a completely different picture of the top 50 rankings.

The 50 most active cryptocurrency VCs in the past 12 months

Finally, let's look at the overall cryptocurrency investment by the amount invested in the past 12 months. This tells us who is currently actively involved, rather than companies that were active during the period of 2018-2021, and who may be particularly willing to engage in seed/early-stage transactions.

When we are collecting data, we have found the following situations.

Overall encryption VC department is healthy

According to Pitchbook's data, 2022 is the biggest year in the history of cryptocurrency/blockchain venture capital, with over $26.2 billion in new investments, just slightly higher than the $25.1 billion in 2021. Let's take a look at some of the charts.

However, according to Pitchbook's quarterly data, the situation is different. Activity reached its peak in the first quarter of 2022, with new capital investment slightly exceeding $11 billion, while the fourth quarter was only $2.5 billion.

The estimated new investment amount for the first quarter of 2023 is approximately 1.8 billion US dollars, which is the lowest number since the fourth quarter of 2020.

However, based on the significant growth in February 2023 compared to January, it appears that we have now turned the tide and as we enter the second quarter of 2023, the trend is on the rise. Wise companies are now placing their bets on the next cycle.

From the perspective of exit strategies, there are approximately 70 major cryptocurrency venture capital equity exits in 2021 and 2022 respectively (not to mention the liquidity brought by all token investments). Although the exit strategy for 2023 has declined somewhat, the long-term trend is clear. This industry will continue to exist.

What is the current round of valuation that we are seeing?

Finally, we will introduce the median estimated valuations for seed and Series A cryptocurrency venture capital in the industry. Below are the median valuations for seed, Series A, and Series B transactions as of January 1, 2023 to March 16, 2023.

Seed Trading Valuation

In the cryptocurrency industry, how do the valuations and fundraising amounts of seed round transactions develop over time?

As shown below, the median seed round funding amount for 2023 is $3 million, with a projected pre-money valuation of $22.8 million, with a valuation range from $11 million to $43 million.

Interestingly, according to Pitchbook data, the average valuation of seed rounds is actually higher than that of 2022, but the number of completed transactions is about 50% less than the average level of 2022. Based on our own experience, most seed transactions in the cryptocurrency field without revenue are estimated to have a pre-money valuation between $10 million and $20 million. Therefore, Pitchbook may have data limitations for seed round valuations of cryptocurrency companies so far in 2023.

A-round transaction valuation

How have the valuations and fundraising amounts of A-round transactions in the cryptocurrency industry developed over time?

The median Series A funding amount in 2023 is $9.7 million, with a pre-money valuation estimated at $90 million. The valuation range is from $55 million to $115 million. These Series A transactions are typically allocated to companies with annual revenues between $1 million and $10 million, with a proven product-market fit and month-over-month growth during the current economic downturn.

B Round Transaction Valuation

The valuation and fundraising amount of B-round transactions in the cryptocurrency industry, how do they develop over time?

The median B-round funding amount in 2023 is $55 million, with a projected pre-money valuation of $740 million, higher than the $295 million in 2022. Only a few (9) B-round transactions were completed in 2023, so this number may decrease as more transactions are completed. The 25-75% percentile range for 2022 was $150 million to $1.25 billion.

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