Crypto VC Spending Rebounds, Investors Get Picky

Crypto venture capital (VC) spending showed signs of recovery in the final quarter of 2024, according to a new report by PitchBook. Deal values surged to $2.4 billion, marking a 13.6% increase from the third quarter. However, the number of deals declined to 351 from 411, indicating a growing selectivity among investors.

PitchBook's Robert Le noted that the rebound in funding suggests investors remain willing to back established teams and differentiated technologies. However, the pullback in deal count highlights the increasing selectivity of investors, a trend first observed in the third quarter.

Looking at the data from 2023 and 2024, crypto VC spending topped out at $10 billion across 1,940 deals in 2023, with investors deploying $10.3 billion via 1,936 deals in 2024. While values were on the rise in 2024, they were still far from the levels seen in 2021 and 2022.

Breaking down the data further, the median check cut in the seed stage jumped 20% to $3 million in 2024 from $2.5 million in 2023. Early-stage funding rose 26% to $4.8 million. However, late-stage funding saw a slight drop from $6.4 million to $6.3 million, suggesting that founders at more mature companies are raising smaller but strategically focused rounds.

The data reveals a mix of positives and negatives, with crypto VC spending not yet back to 2021 levels. However, it also shows signs of maturity in the crypto VC space, with investors becoming more selective and founders focusing on strategically important rounds.