Amid renewed interest in cryptocurrency projects, some Web3 startups are hoping to get support through accelerator programs.
Startup accelerators provide founders with mentorship and guidance in exchange for early equity in their company. Perhaps the most famous example is San Francisco-based Y Combinator, which counts several cryptocurrency companies — including Coinbase and OpenSea — as alumni.
Read more: Funding Cover: Y Combinator wants more stablecoin startups
Leading technology venture capital fund a16z announced the selection for its spring 2024 cryptocurrency startup accelerator this week. The group of 25 startups will spend ten weeks in London receiving mentoring by the a16z crypto team. Among the list to publish By a16z Operating Partner Jason Rosenthal, were projects for Farcaster infrastructure, decentralized food delivery, and zero-knowledge passport authentication.
Each startup in the a16z crypto accelerator receives a $500,000 investment from a16z in exchange for a 7% equity stake. Alumni of the program include R&D organization Flashbots and wallet platform Phantom.
Read more: A16z pumps $100 million into EigenLayer
Also this week, the organization behind the layer-one blockchain Avalanche announced the inaugural cohort at its own accelerator, called Codebase. The accelerator is solely for Avalanche-based startups, and the AVAX-focused decentralized venture capital called Colony Lab will invest between $500,000 and $1 million per startup.
Web3 gaming infrastructure company Helika announced that it will partner with Pantera, Spartan Capital, Sfermion and other venture capital firms to direct up to $50 million to startups in its newly launched gaming accelerator.
All of this comes at a time when venture capital is showing renewed strength in the cryptocurrency space. Native cryptocurrency company 1KX announced that it has raised a $75 million fund that was subscribed on Thursday. Hack VC closed a $150 million round late last month.
Strong cryptocurrency accelerators can build a community of founders in the network-centric Web3 space, said Sam Lehman, director of Symonic Capital.
Lehman added that the proliferation of new cryptocurrency accelerators could be partly due to funds wanting to grow their brand or quickly deploy capital into startups. Some accelerators can be predatory.
“Some accelerators take advantage of the early stage in which they invest as well as the proposed 'value-add' to enter and take very large positions in companies from the beginning. Founders should definitely think twice about whether the terms they will accept from the accelerator,” Lehman said in a text message. “You deserve what they get in return.”
Web3 games remain hot
Investment rounds in Web3 Games have quietly increased in size and number in recent months. The latest example is Parallel Studios, which just announced a $35 million round that attracted investments from VanEck, Solana Ventures, and The Spartan Group, among others.
Read more: Immutable and Polygon Labs have launched the Inevitable Games Fund with hopes of raising $100 million
Parallel Studios developed the buzzy NFT-powered card game Parallel, which recently opened to the public in its beta version. It's also building an AI-powered strategy game called Colony.
Gunzilla Games, MyPrize, Elixir Games, Eluvium All of them are gaming projects that raised more than $10 million in funds this week.
Other notable fundraisers
- AI agent creation platform MyShell has raised $11 million in pre-Series A funding led by Dragonfly.
- Peak blockchain project focused on DePIN fee $15 million in a round led by Borderless Capital and Generative Ventures.
- Data availability startup 0G Labs has raised $35 million.
- Polychain led a $15.3 million investment in intent-based execution network dappOS in a round that valued the startup at $300 million.
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