Crypto Fundraising Hits Five-Year Low as Investors Pivot Toward AI and Payments Infrastructure
Crypto's capital winter deepens—fundraising just hit its lowest point in half a decade. The smart money isn't just hibernating; it's packing its bags for greener pastures.
Where's the money going instead?
Follow the venture capital flow, and you'll find it flooding into two sectors: artificial intelligence and payments infrastructure. AI's promise of autonomous, intelligent systems and payments' bedrock utility are siphoning billions that once chased the next meme coin moonshot. It's a brutal recalibration—investors are voting with their wallets, demanding tangible utility over speculative hype.
What does this mean for crypto?
This isn't a death knell; it's a pressure test. The sector is being forced to mature. Projects with real-world use cases, particularly those bridging to traditional finance or solving genuine inefficiencies, are separating themselves from the pack. The era of 'funding for a whitepaper' is over. The bar for investment is now demonstrable technology and a clear path to adoption—or at least a convincing AI buzzword in the pitch deck.
The pivot reveals a harsh truth in tech investing: yesterday's disruptive darling is today's legacy sector—just ask anyone who went all-in on metaverse real estate. For crypto, the path forward is built, not just traded.
The number of crypto VC rounds declined in January, following a year-long slowdown of new raises as funds became more cautious. | Source: Cryptorank
YziLabs was the leading fund in January, leading four rounds, followed by Coinbase Ventures with three funding rounds.
Animoca Brands, previously highly active in Web3, saw a significant outflow of activity, but also closed three rounds in the past month.
Not all funding rounds were reported as of January 30, but overall, the slowdown trend has extended for the past 12 months. Funding follows general crypto performance and optimism, and currently signals an outflow of activity. Funding activity is lower than average, with the biggest round for the past 30 days at $250M.
Crypto funding switched to AI
Funding rounds for AI projects have been the leading sector for the past month. Payments are also a growing subset, based on the ongoing adoption of stablecoins and fintech features in crypto wallets.
Binance Alpha tokens remain one of the main venues for exposure and fundraising, followed by RWA projects.
Fundraising has abandoned most retail-oriented Web3 features, instead turning to crypto platforms primarily as infrastructure. DeFi and blockchain services remained some of the most well-funded sectors.
The most numerous rounds were limited to the $3M – $10M category, with 10 rounds valued at over $10M. There was a significant divergence between seed rounds, with a larger number but smaller liquidity, and several undisclosed rounds with significant allocations. Only three funding rounds were directly supplied by angel investors.
Talos reached the biggest valuation of $1.5B, though based on a raise of just $45M. RAIN had the biggest and most widely acclaimed round for $250M.
Token sales also slow down
Token sales in the FORM of IDO or ICO also slowed down, after a few months where direct token sales were livelier than VC raises.
In January, only 37 token sales were reported, raising $116.9M. The market has shown signs of failing to absorb the proposed token unlocks, and demand for new project tokens was slow due to the lack of an altcoin season. Unlike previous cycles, new projects did not have a high profile and were only listed based on special exchange programs.
Solana emerged as the most active chain for new raises in the past year, but came in second this January. ethereum attracted the most IDO rounds in the past month, followed by BNB Chain. Binance Wallet was the platform with the highest return in January, followed by MEXC token sales. Projects are rarely deployed on Base, with only five rounds in January.
The smartest crypto minds already read our newsletter. Want in? Join them.
