Are VCs returning to crypto? February again suggests confidence

For the first time since March 2022, venture capital investments in crypto startups have increased, reaching $1.9 billion in the fourth quarter of 2023. This figure represents a 2.5% increase from the third quarter, according to the latest Pitchbook report.

The development coincides with a resurgence of investor interest in crypto startups, spurred by the approval of Bitcoin (BTC) exchange-traded funds (ETFs) in early 2024.

In February, a diverse group of crypto startups announced recent fundraisings, including Lava Protocol, Analogue, Helica, Trueflation, and Omega, among others.

The past two weeks have seen venture capitalist Andreessen Horowitz (a16z) announce a $100-million check for Ethereum's reinvention protocol EigenLayer. The ecosystem recently received funding from Binance Labs through its liquidation recovery service Renzo.

Another $27 million poured into the deal layer was used in a seed funding round led by Founders Fund and Dragonfly, while venture capital firm HackVC raised $150 million to invest in early-stage crypto and artificial intelligence (AI) startups.

Cointelegraph's VC Roundup highlights some of the startups that received funding in February.

Tyco has raised $15 million before its mainnet launch

Ethereum Layer 2 scaling solution Tyco has closed $15 million in Series A funding ahead of its mainnet launch. The round was led by Lightspeed Faction, Hashed, Generative Ventures and Token Bay Capital, with participation from previous investors Wintermutt Ventures, Amber Group and OKX Ventures, among others. In the year The startup, founded in 2022, has so far raised a total of $37 million in three rounds, promising to build a decentralized layer-2 architecture to support all Ethereum Virtual Machine (EVM) opcodes. Tyco says it has run six testnets that have included more than 1 million unique wallets and 13 million transactions.

Singularity Closes $2.2M in Support for DeFi Compliance

Decentralized finance protocol Singularity has announced a $2.2 million round of funding led by Gumi Cryptos Capital. The startup targets DeFi applications and institutional investors seeking the privacy of on-chain transactions. Additional investors in the round include Nomura subsidiary Laser Digital, Eureka Partners and previous investors such as Apollo Crypto, Digital Asset Capital Management and Gandel Invest. Unity uses NOir-based zero-knowledge circuits for SNARK verification systems developed by Aztech. The technology allows for confidentiality of on-chain transactions. The latest round brings Singularity's total funding to around $4 million since inception in 2022.

AltLayer receives $14.4M in strategic funding

AltLayer, a protocol for launching native and refactored layers using the bright and zk stack, has successfully raised $14.4 million in a strategic funding round co-led by Polychain Capital and Hack VC. The platform offers Rollup-as-a-Service (RaaS) that allows developers to launch rollups. The group says it's working with Babylon to build a decentralized authentication layer that will be used by Bitcoin's stock, recreating a repackaged blockchain framework outside of Ethereum. The solution, according to the startup, allows users to share BTC on Bitcoin while still protecting external networks. Dr. Yaoki Jia, founder of Altlayer, said: “By creating hundreds of thousands of scrolls, we need to create business models where scrolls are self-sustaining, with clear value for developers and end users” deploying DApps on the Ethereum network. “Reclaimed packages are now an integral part of this vision.” Additional investors in the round include HashKey Capital, OKX Ventures, Bankless Ventures, Primitive Ventures and SevenX, among others.

Congratulations @alt_layer!

Having successfully closed a $14.4 million strategic funding round, HashKey Capital is proud to participate in this milestone. #HashKeyportfolionews https://t.co/mUqyW8gmUN

— HashKey Capital (@HashKey_Capital) February 22, 2024

AI-powered prediction platform PredX raises $500k in pre-seed round

PredX, an AI-enabled prediction market, has successfully raised $500k in pre-seed funding, reaching a valuation of $20 million, according to a statement. The round was led by Penrose Tech with support from Malana Ventures. Added to the SEI chain, PredX allows users to trade predictions on current trends and events such as elections and buy stocks based on the event or outcome probability. The startup uses blockchain to record all transactions for transparency and integrates AI to customize event alerts and analyze vast amounts of data on cryptocurrencies, technology and celebrities. PredX has also applied for patents for two AI algorithms and is preparing to launch a testnet soon, planning to support the EVM ecosystem.

Ouinex has raised over $4M from the community in seed and private rounds

Digital assets trading platform Ouinex has raised more than $4 million in its seed and early private funding rounds. The funding was raised entirely by Unix community traders from traditional financing, the company said. The startup was founded by former TradiFi executives in 2011. “Our commitment to a user-driven approach not only upholds the principles of decentralization, but also ensures that members of our community are not only investors and users, but active participants in shaping the future of Ouinex,” said Ouinex CEO Eli Larbi.

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