"OKX: Tech Alone Not Enough, Crypto Startups Must Adapt to Market Trends"

Crypto startups seeking venture capital (VC) funding need to demonstrate more than just solid technology, according to the founder of OKX's investment arm. In a recent interview with Cointelegraph, OKX Ventures' Jeff Ren emphasized the importance of a startup's ability to read market trends and adapt to user needs.

Ren noted that while a strong tech infrastructure is crucial, it's equally important for founders to show how they can pivot and align their solutions with the evolving market. He cited examples of successful partnerships that emerged from teams who initially pitched early but returned with solutions that matched market demands.

VC funding in the crypto industry has seen a decline since its peak in 2022. According to PitchBook data, only $10 billion was invested across 1,940 deals in 2024, compared to $30.2 billion in 3,500 deals the previous year. Despite this, OKX invested over $100 million in capital to fund 60 crypto startups in 2024, focusing on ecosystems such as Solana, Sui, Aptos, TON, and Bitcoin.

OKX's investment decisions are supported by market trend analysis and user needs assessment through its OKX wallet. When considering an investment opportunity, Ren first evaluates whether the startup's project can be integrated with OKX's wallet infrastructure to create value. He used the example of Web3 games, where OKX's wallet could facilitate the purchase of in-game assets or provide on-chain liquidity for them.

However, Ren acknowledged that OKX, like many VCs, has expanded its checklist for funding and is carefully vetting crypto startups using various analytics tools. Other VC firms have also reported increased scrutiny, with LongHash Ventures' founder Shi Khai Wei noting that obtaining funding this cycle has been more challenging than in 2020-2021. Illuvium's founder, Keiran Warwick, echoed this sentiment, stating that VCs now expect to see gameplay, artists, developers, security audits, and more.

Looking ahead, Ren expressed excitement about leveraging AI to enhance the decentralized finance trading experience. He also identified opportunities in moving intellectual property assets on-chain, investing in memecoin infrastructure, and the eventual market fit for non-fungible tokens (NFTs).