Much hope remains after the crypto winter nearly froze the industry: the Luna crash, the Celsius bankruptcy, and the arrest of FTX founder Sam Bankman-Fried for alleged fraud. Then there was the company pulling out amid an economic downturn.
In 2021, web3 startups raised a record $29.2 billion worldwide. In 2022, that figure fell to $21.5 billion, though that’s still far more than the $4.8 billion and $4.2 billion these companies raked in in 2020 and 2019, respectively.
Black people who have invested in crypto have been disproportionately impacted over the winter, although many black founders and investors who spoke to TechCrunch remain optimistic about the sector’s potential for the community and society at large. On the contrary, last year’s economic correction was necessary, they told TechCrunch.
“Bubble had to burst,” said People of Crypto co-founder Simone Berry. “It was not sustainable and an economic correction was needed. The downturn has weeded out bad actors who were only entering the space for quick bucks. This has created an opportunity to break out of the hype cycle, paving the way for development that will grow the ecosystem in a sustainable way, adding value.
Pryce Adade-Yebesi, the co-founder of Utopia Labs, agreed. “This period of time was a legitimate consequence of a period of rampant speculation and corruption,” he told TechCrunch. “It will be a good time to concentrate. Getting back to the reality of solving pervasive problems in the world; it’s a big change of pace for the space.
Funding for the founders of Black Web3 has only increased, and the crypto winter has proven to be the most successful year. Crunchbase data shows that US black Web3 founders have raised $60 million (out of the total $11.9 billion given to all US Web3 startups in 2022). This amount is significantly higher than the $16 million these founders received in 2021, during crypto’s peak year (US Web3 startups received $16.5 billion that year).
In 2017, they raised $11 million of $1.03 billion, and in 2018 they raised virtually no dollars of approximately $2.8 billion; note the very thin red line in the chart below. In 2019 and 2020, the founders of Black web3 raised $2.5 million and $4.5 million out of $2.4 billion and $3.2 billion, respectively.
Fundraising in the past year has been difficult for many black founders, and many have been affected by the downturn, although it’s quite telling that black web3 founders were able to raise record sums in the midst of a overall drop in the web financing market3. It seems that investors, too, are in some ways optimistic about black founders, a shift in tone in how such entrepreneurs are generally viewed.
Visualization of data by Miranda Halperncreated with Flourish
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