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Large VC funds are increasingly backing crypto startups spanning DeFi, DePIN, AI and payments.
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Venture capital funding into blockchain and cryptocurrency startups accelerated in February, with decentralized finance (DeFi) projects attracting significant investment flows, signaling that demand for blockchain builders remained strong amid volatile market conditions.
According to data from The TIE, 137 crypto companies raised a combined $1.11 billion in funding in February.
DeFi secured nearly $176 million in total funding across 20 projects. Meanwhile, eight business service providers raised a total of $230.7 million. Startups specializing in security services, payments and artificial intelligence also drew significant interest.
Business service providers and DeFi projects attracted the largest investments in February. Source: The TIE
The biggest venture capital investors targeted “multiple sectors, including key narratives such as AI, Developer Tools, DeFi, DePIN, Funds, and Payments,” The TIE said.
The data is consistent with Cointelegraph’s recent reporting, which showed a large uptick in decentralized physical infrastructure network (DePIN) deals.
The TIE’s data included crypto investment funds by looking at US Securities and Exchange Commission Form D and Form D/A filings. Strix Leviathan had the largest raise at $79.95 million, followed by Cambrian Asset Management at $20.43 million and Galaxy Digital at $18.43 million.
February also saw six notable mergers and acquisitions, including Forte’s acquisition of Web3 privacy developer Sealance and Phantom’s purchase of token data platform SimpleHash.
Notable M&A deals in February. Source: The TIE
Headline: Crypto VCs reveal what they’re looking for in 2025
Funding deals expected to grow in 2025
Crypto markets have experienced extreme volatility in 2025 as US President Donald Trump kicked off his second term with erratic trade policies and tariff threats. However, beyond the short-term volatility, Trump’s pro-crypto administration is expected to bring increased regulatory clarity to the crypto sector.
Positive regulatory tailwinds are also aligning with a rebounding business cycle and growing expectations that the US Federal Reserve will be forced to lower interest rates multiple times this year.
Despite regulatory uncertainty, the US accounted for 36% of all crypto venture capital deals in 2024. Clear regulations under President Trump could serve as a catalyst for more substantial growth in 2025. Source: Galaxy Digital
Lower interest rates and improving macroeconomic conditions are expected to be a net benefit for private capital markets. According to Harbour Invest, a Boston-based private equity firm, “dealmaking confidence has started to return” — a trend that was first identified in the final quarter of 2024.
Against this backdrop, crypto VC deals are expected to top $18 billion in 2025, according to PitchBook. This marks a notable increase from the $13.6 billion raised in 2024.
Magazine: How crypto laws are changing across the world in 2025
This article first appeared at Cointelegraph.com News
