Web3 startups saw a significant amount of funding in 2022, with a total of $7.1 billion raised. Within this funding, the gaming industry received the largest share at $4.49 billion. The metaverse industry, which includes virtual and augmented reality, came in second with $1.8 billion in funding. Social networks followed with $259.1 million. These three industries made up the majority of funding for Web3 startups in 2022, highlighting the growing interest and investment in these emerging technologies.
Explosive Growth of Gaming Industry in Web3 Startup Funding
Gaming was the leading category for Web3 start-up investments, collecting a total of $4.49 billion. Metaverse followed closely behind, raising $1.8 billion, and Social Networks came in third with $259.1 million. These three categories alone accounted for over 70% of the total funding raised.
The report also showed that the Web3 industry saw a significant increase in funding compared to the previous year, with a total of $4.8 billion more raised in 2022. Despite the challenges of the bear market, Web3 start-ups were able to secure significant investment, demonstrating the potential and promise of the industry.
Web3 start-ups in the Metaverse category raised a total of $1.82 billion in funding during 2022, making it the second most popular category for investment, according to a year-end report from Metaverse Post. This accounts for 25.4% of the total investment in the Web3 space, which reached $7.1 billion in 2022. Among the companies in this category, Yuga Labs, the creators of Bored Ape Yacht Club (BAYC), received the second largest amount of funding with a $450 million investment in March for the launch of Otherside Metaverse.
According to the report, social networking start-ups in the Web3 space raised a total of $259.1 million in funding during 2022, representing 3.6% of the total investment in the Web3 space. There is a growing demand for decentralized and secure social networking platforms in the Web3 space, as highlighted by the initiatives of companies like Phaver, Aave, and Lens Protocol, as well as Polkadot.
Start-ups in the Infrastructure, AR&VR, and AI categories raised a total of $516.9 million in funding in 2022, accounting for 7.2% of the total investment in the Web3 space. Within these categories, Immutable, a company focused on non-fungible tokens, raised the most funding with $200 million. AngelList, a start-up focused platform, also raised a significant amount with $100 million. Additionally, Sky Mavis and Improbable, both focused on gaming and the metaverse respectively, raised $150 million each. These four companies were among the top 10 start-ups to attract the most funding in 2022.
Four Venture Capital firms were identified as the biggest spenders in 2022, each investing over $1 billion. Paradigm topped the list with a total of $2.5 billion in investments, supporting 31 projects including Uniswap, Magic Eden, and Optimism. Other major investors included Andreessen Horowitz, which invested $2.2 billion across 25 projects, Sequoia China with $1.5 billion invested in 21 projects, and Matrix Partners China with $1.4 billion invested in 15 projects.