Stablecoin firms lead Q4 2024 crypto VC funding; US tops

In the final quarter of 2024, stablecoin companies raised the most venture capital among crypto projects. These firms accounted for 17.5% of all crypto-focused VC funding, pulling in $649 million across nine tracked deals.

However, Tether dominated this category with a $600 million raise, representing the majority of the funds invested in stablecoin projects during the quarter.

Infrastructure-focused crypto startups followed closely, securing $592 million, or 16% of the total funding, across 53 deals. Among the largest infrastructure deals were Blockstream, which raised $210 million; Hengfeng Corporation with $100 million; and Cassava Technologies with $90 million.

Web3 startups followed next, raising $587.6 million, followed by crypto exchanges, which attracted $200 million in funding. A standout in the Web3 category was Praxis, which secured $525 million to create an “internet-native city,” making it the second-largest deal overall in Q4 2024.

Despite allocator interest in crypto-focused venture funds slightly declining, new funds still raised $1 billion across 20 launches in the quarter.

US-based companies attracted most funds

According to the Galaxy report, startups based in the United States led in both total funding and deal count. U.S. companies secured 46.2% of all venture capital invested in Q4 2024, despite a 17-point decline from the previous quarter.

Meanwhile, Hong Kong startups experienced a funding increase, capturing 17.4% of the total. The United Kingdom accounted for 6.8%, Canada for 6%, and Singapore for 5.4%.

The U.S. led in the number of deals with 36.7%, followed by Singapore at 9% and the United Kingdom at 8.1%. Switzerland and the UAE also made notable contributions, accounting for 5.5% and 3.6% of the deals, respectively.

The U.S. attracts a significant amount of startup funding due to several key factors.

Firstly, the country offers easy access to capital, boasting a well-established venture capital ecosystem. This includes numerous VC firms, angel investors, and institutional investors ready to fund early-stage companies.

Furthermore, a strong entrepreneurial culture encourages innovation and risk-taking, creating an ideal environment for startups to flourish.

Again, the U.S. has a large and diverse consumer market, enabling startups to scale rapidly and test their products across a broad customer base. Tech and innovation hubs like Silicon Valley, New York, and Boston are rich with talent, infrastructure, and industry connections, further drawing in entrepreneurs and investors.

Read also: See how much Crypto VC raised in Q1 2024

Early-Stage vs. Later-Stage Investments

In Q4 2024, the majority of venture capital investments were directed toward early-stage companies, comprising 60% of all capital invested. This indicates that venture capitalists remained focused on funding new and developing businesses.

However, there was a noticeable increase in investments for more mature companies. Later-stage deals accounted for 40% of the funding, a significant rise from only 15% in the previous quarter. This shift was mainly due to Tether raising $600 million, facilitated by Cantor Fitzgerald.

Cantor Fitzgerald played a crucial role in Tether’s $600 million raise, providing the necessary funding in exchange for a portion of ownership in the company. As a result, the firm now holds a 5% stake in Tether, representing a small but significant interest in the company.

Investments in pre-seed deals, typically for startups just getting off the ground, saw a modest increase. This suggests that despite challenges in the broader market, there is still strong interest and activity in new ideas and companies, particularly in the cryptocurrency sector.