Crypto VC funding in 2023

As cryptocurrencies are becoming increasingly mainstream, there is an evident growth in the number of blockchain-related subsidiaries and associated companies. Most of them need investment and consultancy from savvy crypto businessmen, and this is where crypto venture capital (VC) firms come to help.  

Crypto VC funds are looking for startups with strong growth potential and then providing them with funding in exchange for an equity/token stake. Additionally, these investment vehicles share their managerial expertise, grant access to their professional network of partners, as well as help with PR and marketing activities. All this allows entrepreneurs to develop their teams, enter new markets, and assert themselves in the blockchain niche.

On top of that, financial support from reputable crypto VC funds is a great form of branding, which gives startups a higher legitimacy and recognition over their competitors. VC-backed crypto companies will most likely attract greater interest and investment from retail investors in the future. 

Despite the bear trend throughout the beginning of 2022, the industry saw a total of $7.2 billion in venture capital investments by the end of the past year. This means that venture capitalists still plan to play “long” even after the failure of several crypto firms, including Alameda Research, FTX, and Terra. So there’s no doubt that they significantly contribute to the formation of the ongoing blockchain landscape.

Here we have a look at the most authoritative crypto investment firms in the market – touching on who they are and what role they play in today’s digital asset economy.

List of Top Crypto VC Funds

Crypto VC firms are key actors in the process of finding and supporting up-and-coming startups in the Web3 universe. Currently, there are not only independently operating investment funds like Coinbase Ventures, Shima Capital, Big Brain Holdings, and Sino Global, but also large crypto corporations that open their own VC subsidiaries. The most vivid example of such investment branches is Gotbit Venture Arm.  

Gotbit Venture Arm

Starting off our list of the best crypto VC firms is Gotbit Venture Arm. This is the investment branch of Gotbit Hedge Fund that has been one of the industry’s most popular market makers for years. The company was founded in 2017. To date, it has a proven track record in the crypto industry ensured by its professional team of 140+ employees. Among them are experienced traders and managers who previously worked in the world’s leading financial institutions such as Goldman Sachs, Deloitte, McKinsey, and KPMG.

Gotbit Venture Arm most often acts as the lead investor supporting various startups – from DeFi protocols and blockchain-based games (especially AAA games) to infrastructure solutions. It funds either projects with tokens or projects with both tokens and equities. In other words, having a token is the main criteria for eligible startups. The firm stands at the helm of funding innovation in the blockchain space by heavily investing in brand-new ecosystems like:

One of the biggest Gotbit’s superpowers is TGE management. According to public sources data, Gotbit has launched more than 500 projects on top launchpads and various centralized exchanges since 2017. The combination of a venture arm and a market-making service makes Gotbit one of the best partners during the TGE for any ambitious project. The company solves a conflict between investor & trader mindsets and provides large expertise from TGE marketing to anti-sniper protection during the initial DEX listing. 

What makes this VC firm distinguishable from its competitors is its constant openness to Web3 entrepreneurs. In order to help them attract additional funding, Gotbit Venture Arm holds a weekly event called Demo Days. It usually attracts 50+ top crypto VC funds like Animoca Brands, Binance Labs, and Polychain. In this way, the company connects founders and investors together so that the former can pitch their business ideas even at their early stages. Before inviting a fund to participate in Demo Days, the Gotbit team conducts an internal due diligence and excludes private investors from joining in. 

The global mission of Gotbit Venture Arm is to find and accelerate Web3 startups. As Gotbit CEO Alex Andryunin says: “We invest and Make Markets so that at least one out of a hundred projects will really change the world as Ethereum did.”

Coinbase Ventures

Coinbase cryptocurrency exchange also has its own crypto VC fund. However, it’s not entirely backed by the platform, but is rather an independent entity. Incepted in 2017, Coinbase Ventures specializes in early-stage funding of startups in a variety of Web3 sectors. This includes decentralized finance (DeFi), non-fungible tokens (NFTs), layer-one blockchains (L1s), blockchain infrastructure, and metaverse technologies. Among the most prominent holdings of Coinbase Ventures are:

• Aave,
• Uniswap,
• Etherscan,
• Alchemy. 

The firm’s mission is to create an open financial system, and it closely collaborates with those projects who share this intention. Coinbase Ventures is actively involved in the industry’s events and initiatives such as the largest Web3-related conferences, forums, and summits.

As of 2021, this crypto VC fund gained over $30 billion in AUM. Coinbase Ventures has Bitcoin, Ethereum, Litecoin, and Ripple as the most notable digital assets in their portfolio.

Shima Capital

One of the youngest crypto VC firms in our list, Shima Capital, was established in 2021 by Yida Gao, a veteran investor from the Forbes 30 Under 30 list. The company is developed by a team of software engineers, market researchers, and other industry experts, all united by the same idea of expanding the world of blockchain and crypto.  

The primary focus of this fund is to invest in crypto startups and entrepreneurs that are at the pre-seed and seed phases. They usually provide financial backing in the range between $500,000 and $2 million. 

Despite being relatively new to the market, Shima Capital has already funded multiple Web3 projects across DeFi, gaming, metaverse, and crypto analytics. Their diverse portfolio features crypto platforms such as:

• 1Inch,
• Liber,
• Continuum,
• Orb Labs.

In August 2022, Shima Capital managed to raise its first fund amounting to $200,000.

Big Brain Holdings

Like Shima Capital, Los Angeles-based Big Brain Holdings was founded in 2021 and showed itself as one of the most active crypto VC funds in the past year, according to some reports. The company has already made more than $20 million in investment, funding unique and cutting-edge startups in the metaverse, DeFi, and gaming industries. On top of that, Big Brain Holdings has also contributed to infrastructural solutions and decentralized social networks.  

Having a vast knowledge of the Solana ecosystem, the firm mostly focuses on investing in pre-seed, seed and early-stage startups built upon this layer-1 blockchain, including famous:

Adhering to the “crypto forward future” philosophy, Big Brain Holdings’ team claims to provide financial backing to the strongest and the most innovative startups that aim at improving the Solana network and providing the best possible experience to its users.  

Some other L1s of Big Brain Holdings’ interest are Ethereum, Near, Algorand, AVAX, and Celo. 

Sino Global Capital 

Sino Global Capital was founded in 2015 by Matthew Graham. Before starting to operate as a crypto VC firm, it served as a sell-side investment banking platform dedicated to representing international tech companies in China for strategic partnership and investment. 

Today the Sino Global Capital team unites former Wall Street, consulting, private equity, government, and corporate veterans who seek to accelerate the Web3 adoption. The company supports most of the leading blockchain and crypto projects, helping them thrive in the Asian market.

Similar to Big Brain Holdings, Sino Global Capital invests heavily in the Solana ecosystem. However, it also funds a variety of Web3 applications across:

In January 2022, the crypto fund Sino Global disclosed having $300 million in AUM.

Top Crypto VC Funds Streamline the Web3 Adoption

By funding startups through token sales, equity investment, and other financial instruments, crypto VC firms enable early-stage projects to grow and scale at a more rapid pace. Venture capitalists who specialize in blockchain help entrepreneurs successfully transit from Web2 and avoid the milestones that the decentralized internet may bring to them. As such, the Web3 ecosystem is expanding, maturing, and gaining more trust from both retail and institutional investors.

For those who are in search of guidance and investment in their cryptocurrency startups, we summarize our review by briefly answering the questions below:  

What was the total VC investment in cryptocurrency in 2022?

In 2022, the Web3 industry raised around $7,2 billion in investments.

What are top VC firms and founders investing in cryptocurrency?

The list of the best crypto VC funds includes Gotbit Venture Arm (founded by Alex Andryunin), Coinbase Ventures (founded by Brian Armstrong and Fred Ehrsam), Shima Capital (founded by Yida Gao), Big Brain Holdings (founded by SOLBigBrain), and Sino Global (founded by Matthew Graham).

Are Silicon Valley crypto VC firms a better choice?

Although many venture capitalists that invest in the blockchain and Web3 ecosystems are headquartered in Silicon Valley and California, it doesn’t really matter what part of the world a certain VC firm is located in. Decentralization makes crypto investments easier and more democratized!