VC Roundup: Web3 infrastructure, ‘tokenization of everything’ drawing investors

Funding for crypto startups rose to over $1 billion in April, with investors focusing on tokenization, Web3 infrastructure, and institutional demand amid the bull market.

Venture funding for crypto startups peaked at $1 billion in April, marking the second consecutive month above that pivotal mark this year with 161 investment rounds, indicating investors’ renewed interest amid the bull market. 

Key trends catching venture firms’ attention include decentralized infrastructure, solutions for institutional adoption, and the ‘tokenization of everything,’ aa told by Xiao Xiao, partner at HashKey Capital. In written comments to Cointelegraph, Xiao discussed HashKey’s investment priorities at the moment:

“We are focusing on both primary investment and liquid investment. For primary investment, we prefer either late-stage projects, which will have liquidity very soon, or super early-stage projects, which have long-term value and target the next cycle. For liquidity investment, we will do some alternative investments like staking, with lower risk and stable return.”

Another area of attention for HashKey is the convergence of artificial intelligence and blockchain technology. “Enhanced data analytics powered by AI are offering deeper market insights, superior fraud detection, and optimized trading strategies, leading to greater operational efficiency and security,” said Xiao.

Highlights from recent funding rounds include Polymarket’s $70 million funding — backed by Peter Thiel’s venture capital firm, Founders Fund, and Ethereum co-founder Vitalik Buterin — and Humanity Protocol officially becoming a unicorn after a recent $30 million raise lifted its valuation.

This edition of Cointelegraph’s VC Roundup features startups that raised capital in May.

Colosseum invests $2.5M in pre-seed for accelerator program

Colosseum, a dedicated ecosystem for the Solana network, has announced the first cohort of projects to join its accelerator program. The projects were chosen from the winners of the Renaissance hackathon, the largest to date for Solana. The Renaissance hackathon saw 25,500 builders form a record-breaking 1,071 teams. Ten projects were selected from 34 hackathon winners, each receiving $250,000 in pre-seed capital. The program will conclude with a virtual Demo Day, where projects will be presented to investors and have access to Colosseum’s Mentor and Founder Network. Since the first Solana hackathon in October 2020, participation in the event has skyrocketed, with a 1,522% increase in project submissions. The selected projects are Ore, Urani, DBunker, DeCharge, Torque, Legends of the Sun, Meshmap, Blockmesh, Banger, and Rakurai.

Volta announces $4.1M seed funding for institutional smart wallet

Volta Circuit, a multisignature, noncustodial smart wallet platform, has raised $4.1 million in seed funding from Fika Ventures, Haven Ventures, and other investors. The funds will be used to support its infrastructure services launch. The startup provides a multisignature wallet with governance and policy controls enforced directly on-chain, offering cryptocurrency self-custody to trading firms, asset managers, and banks. Volta was founded by George Melika, former chief technology officer of sFOX, and Daniel Kim, former head of capital markets at Maple Finance.

Hemera raises $2.6M for Web3 data management

Hemera announced $2.6 million in funding, led by LIF Capital and Nomad Capital, with the participation of SNZ and Chainlink. According to Hedera, angel investors in the round also included the founders of ZetaChain and Sending Labs, Wish co-founder Danny Zhang and Microsoft AI executive Harry Shum. The funds will be used to develop its decentralized protocol, which uses AI for on-chain data querying, allowing insights through a large language model (LLM) optimized for Web3. Hemera Protocol’s public beta version was recently released alongside its showcase application, SocialScan.

Zeta Markets raises $5M for Solana layer-2

Zeta Markets, a Solana-based protocol for on-chain perpetuals, raised $5 million in a strategic funding round, bringing its total funding to $13.5 million. Electric Capital led the round, which included participation from DACM, Selini Capital, Airtree Ventures and angel investors Anatoly Yakovenko, Mert Mumtaz, and Richard Wu, among others. The funding will help Zeta’s team build the first decentralized finance layer-2 on Solana, according to a statement. The protocol wants to achieve the performance of a centralized exchange while maintaining the security and self-custodial nature of a decentralized exchange. The Zeta team claims the protocol has more than 100,000 monthly active users and has crossed the $6 billion mark in total trading volume.

Moso secures $2M for e-commerce, crypto integration

Moso, a platform that combines online shopping with cryptocurrency rewards, has successfully raised $2 million in seed funding. The round saw participation from Symbolic Capital, Dao5, Coinlist, Polygon Ventures, and several strategic angel investors. The startup is said to have established partnerships with over 2,000 top retailers, including Walmart, eBay, and Shopee, allowing users to earn cryptocurrency rewards while shopping. “Our platform is engineered to democratize access to Web3 for consumers new to the space, simplifying their engagement with and benefit from decentralized technologies through the familiar avenue of online shopping,” said Moso co-founder Blake Capozza.

Crestal closes $2M pre-seed round

Crestal Network has successfully secured $2 million in pre-seed funding from a variety of venture capital firms, including Lingfeng Capital, Cogitent Ventures, Kyro Ventures, Veris Ventures, Smape Capital, MH Ventures, Layer Labs, Pragma Ventures, Builder Capital, NxGen.lens, Artemis Capital, and Quotient Ventures. Behind the startup is Eric Chen, former head of engineering at Tron, and Marouen Zelleg, former business director at Polygon. The company targets Web3 developers with its modular services platform that facilitates decentralized back-end design and deployment. The funds will be used to accelerate the development of Crestal Network’s Testnet, expand the team, and boost community engagement.

Zest Protocol raises $3.5M in seed funding led by Tim Draper

Zest Protocol, a lending protocol built for Bitcoin, disclosed a $3.5 million seed raise led by Tim Draper’s Draper Associates with participation from Binance Labs, Flow Traders, Trust Machines, Asymmetric, Bitcoin Frontier Fund, Gravity Fund, Primal Capital, Hyperrithm, Mitcon Crypto, Tykhe Block Ventures, Elixir Capital and more. Zest Protocol wants to enable BTC holders to deploy their assets in on-chain lending markets. According to Zest, it uses the upcoming Stacks Nakamoto and sBTC blockchain upgrades to create a Bitcoin-native lending experience. “I don’t want to just hold BTC — I want to use it!” said Tim Draper in a statement about the funding round.