Venture Capital Spending Reaches $4.5 Billion in First Quarter
Preliminary data from PitchBook indicates that venture capital (VC) spending in Q1 reached approximately $4.5 billion, significantly higher than the previous year's average of over $2 billion per quarter. Key points include:
- Half of the Q1 funding was attributed to Binance's deal with Abu Dhabi's MGX.
- If this trend continues, total VC spending could reach $18 billion for the year, though still below the $33 billion in 2021.
- The average deal size in March was around $60 million, reflecting an increase from last year.
- Larger deals ($100 million+) are expected to rise as mega funds re-enter the market.
- Katie Haun is reportedly raising $1 billion for two new funds, indicating strong interest from limited partners.
- Institution-focused projects are anticipated to attract the most funding.
- There is less enthusiasm for retail-focused applications, as retail participation in the market remains low.
- Social media projects like Farcaster may have potential, particularly if they expand their audience beyond crypto natives.
This data suggests a rebound in VC activity within the crypto sector, primarily driven by larger investment rounds and institutional interest.