Crypto Startups Raise $777 Million in Venture Capital Funding in May

Cryptocurrency startups raised $777 million in investments from venture capital (VC) funds in May. according to the DefiLlama data aggregator. This is a 17% drop from the total amount cleared in April and the second consecutive month of slowdown in venture capital.

Projects focused on building blockchain infrastructure received $630 million last month, representing 81% of the total amount raised in the period. However, this is $100 million less than the total capital flows directed to this sector in May.

Farcaster recorded the largest infrastructure-related funding round in the period, with $150 million in investments coming from names like Variant Fund, a16z crypto and Paradigm.

The bitcoin (btc) decentralized financial ecosystem also received attention from venture capitalists, as btc staking protocol Babylon raised $70 million from relevant players such as HashKey Capital, Polychain Capital, and Galaxy.

Despite showing three times growth between March and April, money going to decentralized finance (DeFi) startups dropped to $50 million in May. The largest funding round in DeFi was made by Fortunafi, a real-world asset tokenization protocol that received $9.5 million.

Notably, the non-fungible token (nft) sector saw a new flow of venture capital money in May, as nft utility platform Galaxis raised $10 million from Chainlink and four other investors.

Web3-centric applications also witnessed growing interest from venture capital funds last month, generating $48 million in funding, a 153% month-on-month increase. Kiosk, a Farcaster client that merges social media and blockchain, recorded the largest funding round in this sector by capturing $10 million in venture capital.

Blockchain games close the list with almost 27 million dollars invested, a slight jump compared to the 24.7 million dollars raised in April. Param Labs received $7 million from venture capital such as Animoca Brands, Delphi Digital and Mechanism Capital.