While public markets consisting of stocks, bonds, and securities continue to attract investments, private markets like venture capital funds may see a decrease in their existing funds. BitKraft fell short of its $240 million target for its second investment fund in 2023, raising $220.6 million according to SEC filings. The capital is expected to be utilized in information technology and the gaming sector.
The gaming industry, representing a $330 billion market, is seen as a strong segment in the recovery of the fourth quarter of 2023, with positive launches expected for Web3 games both recently and in 2024, according to Pereira’s team.
However, challenges persist for early-stage ventures. Adam Struck, founder of VC firm Struck Capital, mentioned that funds are likely to seek businesses with proven models ready for growth in the coming months, following a more rational approach to company building after the 2021 boom.
Struck also predicts a positive year for the gaming industry and decentralized finance (DeFi) as more corporate capital is expected to flow into blockchain ecosystems, with innovative games integrating seamlessly into Web3 and an anticipated increase in total value locked in DeFi due to upcoming interest rate cuts and more real-world assets being moved onto the blockchain.
Blockchain data analytics firm DefiLlama reported that at least $5.7 billion was allocated to crypto businesses in 2023. One such funded crypto venture is Lolli, which offers Bitcoin and cashback rewards to shoppers through individual users at companies like Ulta Beauty, Groupon, and Booking.com. Bitkraft Ventures led an $8 million Series B round in the venture, with supporters including Serena Williams’ Serena Ventures. Lolli’s CEO, Alex Adelman, believes ventures can still succeed in the current environment, separating sustainable business models from the unsustainable in last year’s crypto market downturn.