Bitcoin Startups Raised Nearly $1 Billion Between 2021 and 2023: Report

Austin, Texas-based Trammell Venture Partners (TVP) has released the results of its second annual in-depth study of the fast-growing Bitcoin-based startup and venture capital ecosystem.

Despite a notable decline in cryptocurrency venture market investment throughout 2023, TVP’s research highlights a remarkable surge in the Bitcoin startup sector, particularly at the pre-seed stage, with the number of transactions increasing by a notable 360% year-on-year. .

Unlike the broader startup landscape, which saw exit activity decline to a 10-year low in 2023, Bitcoin-based startups have shown resilience and growth, increasing 69.2% year-on-year. According to data from TVP, these early-stage Bitcoin startups have raised close to $1 billion in total funding between 2021 and 2023, indicating significant interest and investment in the sector.

Commenting on the findings, TVP Managing Director and Founding Partner Christopher Calicott noted a strong desire among founders to build on Bitcoin. He highlighted the growing number of technological advancements and supporting infrastructure that fosters innovation within the Bitcoin ecosystem.

“Early indicators from TVP’s research are consistent with our expectations for the end state of ‘cryptocurrency’ ventures: Founders really want to build on Bitcoin,” Calicott said. “With the rapid increase in support for various technologies that improve Bitcoin’s scalability and buildability, this long-held TVP hypothesis is becoming a reality supported by evidence and data.”

In 2023, the number of Bitcoin-based venture deals increased significantly, increasing by 69.2%, while the number of broader cryptocurrency venture deals decreased by 35.3%. Despite the increase in Bitcoin-based venture transactions, cryptocurrency venture transactions still account for an overwhelming majority of the number of transactions and venture funds invested.

“Due to cyclicality and Bitcoin’s institutional acceptance, Bitcoin’s market capitalization dominance is significantly higher than it was at the time of the 2023 report,” Calicott said. “Despite this, allocations to Bitcoin-based venture capital remain relatively very low. Thanks to these early-stage Bitcoin startups, we believe deltas will begin to close as more allocators begin to see the compounding benefits of Bitcoin’s rapidly expanding design space.”

TVP’s commitment to driving insight and research into the venture capital landscape has resulted in the launch of the industry’s first dedicated Bitcoin-based ecosystem-focused fund series in 2021. This annual release of TVP’s research overview of the emerging Bitcoin-based venture capital landscape aims to provide valuable coverage. Data and support for institutional investors looking to explore opportunities within the growing Bitcoin startup sector.

The full TVP Bitcoin Startup Ecosystem Research Overview is available for download, providing a comprehensive overview of the evolving landscape and investment opportunities for Bitcoin-based technologies.