Some venture funds have slowed investments in Web 3.0 amid a cryptocurrency winter and the collapse of the FTX.com exchange, but they continued to invest in projects that are “true builders,” multiple investors told Forkast.
“Last year, we were at least looking at 10 deals a week. This year, we’re looking at maybe only one-third of that,” Akio Tanaka, cofounder and partner of Asia-based venture fund Infinity Ventures Crypto, said in an interview with Forkast at the NFT Taipei conference on Thursday.
Tanaka said the company continues to invest, but investments have “slowed down significantly” since June. “It’s not just [about] the number of deals that we consider to look at, but also we take longer to make a decision,” he added.
The pace of capital deployment has slowed this year, but total funding at crypto startups this year is expected to exceed 2021 levels, according to a December Reuters report that cited data from research firm Pitchbook. The data showed crypto projects accounted for US$19.9 billion of venture capital investments in the first nine months of this year, up 41% from a year ago.
Patrick Lee, cofounder and managing partner of U.S.-based PKO Investments that has invested in several media and tech projects in Asia, told Forkast that his investment firm has reduced its pace of investment since May, in light of the Terra-Luna crash and the tech downturn.
“Our first Web 3.0 investment was maybe in July last year. At our fastest, we were investing in a company [every] week, late last year,” said Lee, who cofounded movie review site Rotten Tomatoes two decades ago.
“We used to be putting in US$500,000 to US$1 million across 50 investors coming in through a syndicate. Now it’s more like US$250,000 to US$500,000 with about 30 investors,” Lee added.
More cautious
Venture funds are also taking a much more cautious approach when reviewing potential investments.
“We’re still investing, but much more conservative,” Jason Fang, founder of Sora Ventures, which is in the process of moving its headquarters from Hong Kong to Taiwan, told Forkast, adding that his fund wants to “play it safe and just buy major tokens” as “we’re already up multiple returns.”
“So [we’re in] no need to [go] all in and take high risk on the VC model,” Fang added.
Animoca Brands, the Hong Kong-based blockchain gaming unicorn and venture capital firm, also continues to make investments. Yat Siu, cofounder and chairman of Animoca told Forkast on Thursday that Animoca remains bullish on the development of the Web 3.0 space.
“Within our portfolio and ourselves, for some of the businesses that we’re doing, we see deals …….