After the Luna fall, Celsius’s bankruptcy, and the arrest of FTX creator Sam Bankman-Fried for suspected fraud, the crypto winter nearly froze the industry, yet much optimism remains. Then, as the economy tanked, investors pulled back.
A record $29.2 billion was raised by web3 startups throughout the world in 2021. By 2022, the figure plummeted to $21.5 billion — but that’s still far more than the total $4.8 billion and $4.2 billion such corporations brought up in 2020 and 2019, respectively.
Although many Black startups and investors who talked remain positive about the sector’s prospects for the community and society at large, they were impacted disproportionately hard throughout the winter. Last year’s economic slump was warranted.
“Bubble has to pop,” People of Crypto co-founder Simone Berry remarked. “It wasn’t sustainable and economic adjustment was needed. During the recession, dishonest players who had joined the market for quick cash disappeared. It provided a route out of the hype cycle, making room for improvements that will benefit the ecosystem over the long term.
Similarly, Utopia Labs’ co-founder Pryce Adade-Yebesi saw this as a good idea. “This period of time was a just consequence for a period of wild speculation and grift,” he told. “This is an excellent opportunity to concentrate. Getting back to the realities of fixing chronic issues in the world; it’s an essential change of pace for the space.”
Funding for Black web3 entrepreneurs has only risen, and the crypto winter proved the most successful year. In 2012, Crunchbase reported that Black web3 entrepreneurs in the United States had raised $60 million (out of a total of $11.9 billion contributed to web3 businesses in the United States in 2012). That figure is much greater than the $16 million such entrepreneurs got in 2021, during crypto’s record-breaking year (U.S. web3 startups received $16.5 billion that year).
In2018, they raised essentially zero money out of about $2.8 billion, as seen by the vanishingly thin red line in the image below, compared to $11 million in 2017 out of $1.03 billion. Funding for Black web3 was $2.5 million in 2019 and $4.5 million in 2020, out of a total of $2.4 billion and $3.2 billion.
Fundraising last year was hard for many Black founders, and many were hurt by the downturn, yet it’s extremely striking that Black web3 founders were able to pick up record sums amid an overall decline in the web3 fundraising market. In a shift from how Black entrepreneurs are typically seen, it seems that investors are also positive on their potential.
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