VC Roundup: Funding falls to $2.4B in Q3 2024, early-stage startups dominate

Venture capital funding in blockchain-based startups reached $2.4 billion in the third quarter of 2024, marking a 20% decline compared to the previous quarter, according to Galaxy Research.

Between July and September, crypto startups closed 478 deals, a 17% decrease from the second quarter. Despite the slowdown, the year remains on pace to match or slightly exceed 2023 investment levels, with $8 billion invested in the industry’s startups so far. Crunchbase’s Web3 Tracker has previously reported a more conservative figure, citing $5.4 billion in venture capital in the first three quarters of the year.

According to Galaxy’s report, a fivefold increase in funding has been witnessed by startups combining artificial intelligence and blockchain technologies over the last three months. Key contributors included rounds from Sentient, CeTi, and Sahara AI, collectively raising $188 million.

VC Capital and deal count. Source: Galaxy Research

Among the highlights of the quarter were layer-1 blockchain projects, which attracted $341 million, or 13.6% of the total capital. Exochain and Story Protocol secured more than half of that amount. Trading, exchanges, and infrastructure companies followed, raising $265.4 million and $258 million, respectively.

In contrast, Web3 and gaming sectors experienced a 39% decline in investment, the sharpest drop across all categories.

Early-stage companies accounted for 85% of the funding, noted the report. The median pre-money valuation for deals was $23 million, while the average deal size stood at $3.5 million.

This edition of Cointelegraph’s VC Roundup features some of the startups that raised capital in early November.

Eidon AI secures $3.5 Million seed funding led by Framework Ventures

Decentralized artificial intelligence startup Eidon AI has raised $3.5 million in a seed funding round led by Framework Ventures, with participation from cyber Fund. The company was founded by former DeepMind researcher Peter Toth and Sam Padilla, formerly of Google Cloud’s Web3 team. The network incentivizes users to contribute data to onchain AI agents, rewarding them based on the economic value generated. The model aims to integrate AI, blockchain, and human collaboration to create a decentralized economy. According to the startup, the initial version of its network includes an AI agent system for data assessment, an open sequencer, and data-collection applications. Eidon also introduced MemAgents, a multimodal AI agent system designed for labeling-free data collection. The company plans to scale its data collector community, launch the Eidon chain, and release an Agent SDK to enable the creation and integration of onchain AI models.

Related: Zero Gravity Labs secures $290M financing for decentralized AI operating system

Brevis raises $7.5M for verifiable computing with offchain ZK-proofs

Zero-knowledge (ZK) platform Brevis has secured $7.5 million in seed funding led by Polychain Capital and Binance Labs, with participation from IOSG, Nomad Capital, Bankless Ventures, HashKey, and other angel investors. The platform enables offchain computations verified onchain using ZK-proofs, addressing blockchain scalability and cost challenges for complex computations. In other words, its ZK coprocessor allows smart contracts to access and compute historical onchain data without handling the computational load directly. According to Binance Labs, the technology facilitates data-driven decentralized finance (DeFi), GameFi, and other Web3 applications without impacting liquidity or state fragmentation. Early adopters of Brevis’s technology include Kwenta, JoJo Exchange, and Trusta.

Multiledgers lands $1M investment for ESG-linked assets

Blockchain startup Multiledgers has raised 5.8 million Brazilian reais (or nearly $1 million) in a funding round co-led by Oxygea and Indicator Capital, with the participation of Koyamaki Ventures. The platform offers an integrated solution for companies managing ESG assets, including carbon credits and renewable energy bonds. The startup promises to simplify complex processes such as origination, tracking, and certification of these assets, ensuring data reliability and regulatory compliance through blockchain. The investment will be used to further develop the platform’s technology and expand its market reach. According to Multiledgers, the ESG-linked bond issuance market is projected to exceed $3 trillion by 2026, while Renewable Energy Certificates (REC) are expected to reach $100 billion by 2030.

Alluvial secures $4.3M in strategic funding, total reaches $22.5M

Alluvial, the software company behind the Liquid Collective staking standard, has raised $4.3 million in a new funding round, bringing its total funding to $22.5 million. The latest round was led by Variant, with participation from Ethereal Ventures, Brevan Howard Digital, F-Prime Capital, Nascent, and other investors. Liquid Collective is a staking protocol focused on enterprise needs. According to Alluvial, it currently manages over $374 million in total value locked (TVL) and has experienced 360% growth over the past year. The new investment will target solutions for institutional staking as financial institutions explore compliant staking options, said the company. In 2022, Alluvial secured $6.3 million in a seed round with participation from Coinbase, Kraken, and Figment.

Related: Portal Ventures raises $75M for pre-seed crypto fund