Much hope remains after the crypto winter, the sector almost froze: the Luna crash, the bankruptcy of Celsius and the arrest of FTX founder Sam Bankman-Fried for alleged fraud. Then there was the withdrawal of the company in the midst of an economic downturn.
In 2021, web3 startups raised a record $29.2 billion worldwide. By 2022, that number has dropped to $21.5 billion — though that’s still far more than the $4.8 billion and $4.2 billion totals such companies raised in 2020 and 2019, respectively.
Black people who invested in crypto were disproportionately hit during 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. If anything, last year’s economic correction was necessary, they told TechCrunch.
“Bubble had to pop,” said Simone Berry, co-founder of People of Crypto. “It was not sustainable and economic correction was needed. The downturn has removed the bad actors who only entered the space for quick bucks. This has created an opportunity to exit the hype cycle, paving the way for development that will ensure the growth of the ecosystem in a sustainable way, adding value.”
Pryce Adade-Yebesi, the co-founder of Utopia Labs, agreed. “This period was a legitimate consequence for a period of rampant speculation and anger,” he told TechCrunch. “This will be a good time to focus. To return to the reality of solving comprehensive problems in the world; it’s an important change of pace for the space.”
Funding for Black web3 founders just increased, and the crypto winter was the most fruitful year. Crunchbase data shows that US Black web3 founders have raised $60 million (out of the total of $11.9 billion given to all US web3 startups in 2022). That amount is significantly higher than the $16 million such founders received in 2021, during crypto’s record year (US web3 startups received $16.5 billion that year).
In 2017 they raised $11 million out of $1.03 billion, and in 2018 they raised basically zero dollars out of about $2.8 billion; note the disappearing thin red line in the graph below. In 2019 and 2020, Black web3 founders raised $2.5 million and $4.5 million out of $2.4 billion and $3.2 billion, respectively.
Fundraising last year was difficult for many Black founders, and many were affected by the downturn, although it is quite telling that Black web3 founders were able to raise record amounts amid an overall downturn in the web3 funding market. It seems that investors are also in some ways positive towards Black founders, a change of mood in how such entrepreneurs are usually viewed.
Data visualization by Miranda Halperncreated with Flourish
