HashKey Capital Listed As Key Active Investor In The Block’s VC Landscape Report

In The Block's Digital Asset Funding Landscape report, HashKey Capital, a global-focused crypto fund, was named one of the most active venture capital firms in the crypto space.

The report includes the most in-depth, fact-based, and comprehensive analysis of the crypto venture funding landscape to date. It also covers an extensive database of 6,380 venture capital funding deals in the blockchain industry tracked by The Block over the last six years. HashKey Capital was named one of the largest backers of crypto projects over the report, with currently 321 investments in the sector. Firms such as Animoca Brands, Alameda Research, Polygon Studios, and Shima Capital are among the listed firms in VC.

The report shows the incredible potential VCs see in the digital asset space. Although the digital asset industry is still rudimentary stage, it is getting a lot of traction, accounting for 8% of total VC funds invested in the wider technology space in 2022.  

Due to the disruptive potential and the likelihood of a forthcoming technological revolution, VCs were drawn to the digital asset industry. They have responded by investing US$73.4 billion in the space through 2,668 seed and pre-Series A deals, and 86 late-stage deals, with average median values of US$149.2 million and US$105 million, respectively.

According to the report, digital assets are attracting significant investment dollars, particularly in the NFT/Gaming category, which accounts for 1,364 deals, or roughly 21% of the total. Since 2021, the vast majority of those transactions (87%) have been made, allowing NFT/Gaming to outperform every other category in the crypto industry. The Block breaks down the digital asset industry into multiple segments, with Infrastructure garnering 974 VC deals, followed by DeFi at 918, Crypto Financial Services (CFS) at 903, Enterprise at 745, Web3 at 696, Trading/Brokerage at 519 and Data/Analytics/Information (DAI) with 261 deals.

According to the report, another fast-growing segment is the Web3 space, where the number of funding deals has steadily increased over the last three years.

Investors' interest in digital assets appears to be a lagging indicator of the sector's overall health among the findings in the report. For an instance, Bitcoin's price dropped at the end of the 2017 bull run and the industry's deal count increased by more than 200% between 2017 and 2018. Similarly, there was a 150% increase in deal count following the 2021 bull run and by the end of Q3 2022, there were 1,923 deals which is the highest ever in the industry.

The report also looks at investors' appetite for digital assets on a regional basis, concluding that North America is the most significant contributor to global venture investments. The total amount raised in the sector was nearly US$38 billion, with projects based in the United States raising 2,423 deals.

This reflects the United States' dominance in global venture investments, where it accounts for slightly more than half of all deals raised. However, the United States is far from the only digital asset hotspot in the world. Due to a more favourable regulatory climate that emerged that year, the number of deals raised in Europe has steadily increased since 2019. Meanwhile, Asia has emerged as a hotspot for NFT/Gaming projects, particularly in India, where 139 projects have closed funding rounds in the last 30 months.

Other highlights from the report include the rise of Ethereum scaling solutions such as Polygon, Optimism, Off-chain Labs, and Starkware, which collectively raised almost US$1 billion in the past six years. However, the honour of the highest amount raised by a single company goes to NYDIG, a provider of Bitcoin products to multiple industries, which raised US$1 billion via a single growth equity round. 

The Block's analysis of digital asset funding trends also highlights the rise of multichain projects seeking to access more users and liquidity. The report found that of the top 100 DeFi projects, 41 are multichain. The space has accelerated rapidly, with 92% of all multichain project investments coming since 2021. 

"Venture Capital has been a major driving force behind the rapid development of digital assets. Over 6,000 venture capital deals have been closed in the last six years alone. We believe that this trend will continue and despite the bear market, significant capital (from around the globe) will gather here and when the next cycle comes, these investments will pay off. The Block's report provides a comprehensive analysis of these deals and a reference to understanding the crypto industry over the past six years." said Deng Chao, CEO of HashKey Capital.

The Block's Digital Asset Funding Landscape report is now available to download from here.

About HashKey Capital

HashKey Capital is a global asset manager that focuses on investing in blockchain technology and other digital assets. Since its inception, the firm has managed over US$1 billion in client assets. As one of Asia's largest crypto funds and the first corporate investor in Ethereum, its mission is to bring digital assets to the mainstream by connecting Web2 and Web3. HashKey Capital has offices in Hong Kong and Singapore, as well as a significant presence in Japan and the United States. They have invested in over 500 global infrastructure, tooling, and application projects with high potential for mass adoption.