Crypto fundraising is changing its profile, with fewer small-scale or seed deals and more late-stage private rounds and consolidation. Last month’s peak deal was Coinbase’s acquisition of Deribit.
Crypto fundraising for small-scale projects and for early-stage rounds is slowing down. Small deals are out, but big late-stage financing and consolidation deals led the trend in May.
Last month ended with a total of 122 deals, raising $1.92B in total funding. Coinbase’s acquisition of the Deribit derivative exchange led the way for consolidation deals, though it did not count toward VC funding.
Fundraising shifted in May, with a larger share of unannounced deals, as well as backing from undisclosed locations. | Source: Cryptorank
Seed rounds make up around 30% of all deals, but over 37% of funding went to unannounced deals, private placements, or late-stage financing. The Cryptorank data also shows a switch in VC funds, with Animoca Brands supporting just four deals in the past month.
Over 58% of all deals were between $1M and $10M, with six deals at over $50M. A total of 8 rounds received $10 to $20M, with another 8 deals between $20M and $50M. The current VC investment climate has abandoned the model of rapid token creation, as the market has shown skepticism toward insider ownership.
Fundraising favors DeFi projects
Fundraising has shrank by 6.1% based on RootData estimates. RootData counts a total of 62 publicly announced crypto deals, a drop of 61.3% compared to May 2024. The final count for May may still increase, as not all deals are announced immediately.
DeFi projects took 27.4% of all funding, driven by the recovery of Ethereum and the stabilized infrastructure. The deals in March slowed down after some acceleration in April.
The USA led in terms of funds raised with over $1.17B. However, most of the deals had undisclosed international locations, for a total of 86 rounds in May. Crypto startups are still appearing, though they have a more difficult time establishing their reputation.
Fundraising activity remains high on Binance Wallet
Project fundraising switched to private placements and IDO rounds. In May, direct token placements raised over $4.8B, surpassing VC-backed deals or bond-based fundraising.
Ethereum and BNB Smart Chain remained in the lead for IDO and ICO deals. | Source: Cryptorank
Token sales slightly accelerated compared to April’s levels of $4.3B. Token sales are still gaining attention, especially through the Binance ecosystem.
In the past month, Binance Wallet held the top spots with the highest return on token sales. The Binance ecosystem mixed community efforts, point farming incentives, and regular TGE. Previously, PancakeSwap also offered high returns on TGE, airdrops and special sale rounds.
Binance achieved 633% in returns, mostly based on the ability to trade new airdrop tokens, and a community of active airdrop farmers. However, not all BNB Smart Chain tokens had a similar success, with some erasing their gains soon after launching.
Crypto financing is entering a more mature stage, as most projects have already taken up their market share. Hot narratives are re-evaluated, though over 30% of financing still goes to AI projects. However, some of the funds are pivoting from user-directed projects like gaming and NFTs into infrastructure, payments, DEX, and data services.
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