For the past 2+ years, I have been helping VCs source deal flow and startups to fundraise. I have been formally building out my database on VCs and startups fundraising since the beginning of 2023. Initially it was a personal management tool; in-depth analysis was not necessary as real-time interaction with startups and VCs already gave me a good sense of the market.
However, with more than 1000 startup reviewed over the course of 2024, I feel I have collected a meaningful amount of data - and with Notion getting a recent upgrade on data visualisation through charts, what better way to look back at the year and see what my database has to say!
Out of all deals reviewed, Infrastructure continued to be the leading category in fundraising, closely followed by DeFi. In comparison to 2023, there has been a significant decline in data analytics and tooling, while DePIN, Gaming, and Consumer facing applications rose this year.
This shift in demand is due to market sentiment, where we tend to see increased interest into Consumer facing applications as markets pick-up and on-chain activity surges.
Another consideration to take into account are that certain verticals are more capital intensive to launch, not to mention the costs required to build excitement and a strong community prior to TGE. Particularly for Infrastructure and DeFi, raises need to account for costs related to technical development, liquidity/bootstrapping, marketing, and business development to name a few.
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Not all startups are necessarily a fit for VC (more on this here) and with infrastructure tooling available today, it has become easier to launch a prototype, test and refine it iteratively, which has become a popular method via Telegram mini-apps (a bit more on this below).
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When BTC prices rose in Q1, investment focus continued in Infrastructure, with additional concentration into the Bitcoin Ecosystem, where demand for particular use cases (Staking, Cross-Chain Liquidity, etc) increased. This is reflected in the sub-vertical chart where an increase of startups building in the Bitcoin ecosystem surges in Q2 as a post-reaction to capturing some of the VC fund attention.
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Speaking of markets, we tend to see a correlation on pricing (i.e. BTC) together with VC capital deployment, which then feeds into influx of startup raises and valuations (more on this below).
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This pattern in increased deal flow in specific verticals linked to where VC capital is being deployed commonly repeats itself, similar with the number of deals building on Telegram / TON ecosystem, which significantly increased in Q3 following Pantera's investment announcement in May. Telegram has since become a popular choice for fast-launches, testing and validating user demand as well as building community engagement.
One vertical that continuously captures attention and excitement is on the intersection of Crypto and AI. The number of deals categorised under the AI/ML space continue to increase and maintain its position even in 2023, where startups are capitalising on the interest from not only VCs, but also from users (both crypto and non-crypto) who are closely tuned into the ever evolving AI space.
Another takeaway from these charts are the large influx and increase in number of deals in September despite markets being relatively sleepy and unexciting from Q2-Q3. This is heavily due to speculations of the bull market coming in end of 2024 to early 2025 with projects trying to capitalise on the expected momentum to launch their tokens at the right time.
