European DeFi Startups Hit $1_2 B In 2022, 120% Increase From Last Year

VC investment in cryptocurrency startups with European headquarters reached an all-time high in 2022, according to a new study from RockawayX, with $5.7 billion invested.

European DeFi Startups Hit $1_2 B In 2022, 120% Increase From Last Year

European Decentralized finance (DeFi) startups raised $1.2 billion in 2022, a 120% increase over the $534 million invested the year before. Venture capital investments in European crypto startups reached an all-time high of $5.7 billion in 2022, despite the still-volatile market conditions.

With a persistent bear market and high-profile failures of some of the sector’s most important players, including Terra and FTX, 2022 was a turbulent year for the cryptocurrency market. Venture capital (VC) investors supported cryptocurrency startups despite the setbacks.

VC investment in cryptocurrency startups with European headquarters reached an all-time high in 2022, according to a new study from the European investment firm RockawayX, with $5.7 billion invested.

The CEO of RockawayX, Viktor Fischer, noted that the cryptocurrency market is cyclical. The market cap of all digital assets decreased by 80% over the winter of 2018 while startup funding activity remained stable.

The tech and usage traction, along with “bull market” price recoveries, “materialised investments made when digital asset prices were depressed.” According to the headquarters, Europe also has the most cryptocurrency startups (3,977).

The number of unicorn companies—startups valued at over $1 billion—and startups with over $1 million in funding, however, lags far behind American levels. Animoca Brands, Coinbase, Blockchain Capital, and the Digital Currency Group are among the top international investors in European startups.

More than half (52%) of all investments in European DeFi startups went towards those that offer financial services, with infrastructure and Web3 accounting for 32% and 16% of total investments, respectively.

However, infrastructure grew by 24%, while investment in startups based on financial services decreased by 19% from 2021 to 2022. As legislators in the European Union complete the eagerly awaited Markets in Crypto-Assets (MiCA) regulations, Europe is becoming more and more recognised as a cryptocurrency-friendly region.

Due to problems with translation, the EU has delayed the regulations twice. All 24 of the member states’ official languages must be included in the translation of any law passed by the EU. As of this writing, a final vote on the MiCA regulations is scheduled for April 2023.