Much hope remains after the crypto winter almost froze the sector: the Luna crash, the bankruptcy of Celsius and the arrest of FTX founder Sam Bankman-Fried for alleged fraud. Then there was the venture pullback amid an economic downturn.
In 2021, web3 startups globally raised a record $29.2 billion. By 2022, that number dipped to $21.5 billion — though that’s still much more than the total $4.8 billion and $4.2 billion such companies picked up in 2020 and 2019, respectively.
Black people who invested in crypto were hit disproportionately hard during the winter, though many Black founders and investors who spoke to remain optimistic about the sector’s potential for the community and society overall. If anything, last year’s economic correction was necessary, they told .
“Bubble had to pop,” People of Crypto co-founder Simone Berry said. “It wasn’t sustainable and economic correction was needed. The downturn removed the bad actors who only entered the space for fast dollars. It created an opportunity to exit the hype cycle, clearing 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 of time was a rightful consequence for a period of rampant speculation and grift,” he told . “This will be a great time to focus. Getting back to the reality of solving pervasive problems in the world; it’s an important change of pace for the space.”
Funding for Black web3 founders has only increased, and the crypto winter proved the most fruitful year. Crunchbase data shows that U.S. Black web3 founders raised $60 million (out of the $11.9 billion total given to all U.S. web3 startups in 2022). That amount is substantially higher than the $16 million such founders received in 2021, during crypto’s record-breaking year (U.S. 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 around $2.8 billion; note the vanishingly thin red line in the chart 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 hard for many Black founders, and many were impacted by the downturn, though it’s quite telling that Black web3 founders were able to pick up record sums amid an overall dip in the web3 funding market. It appears that investors, too, are in some ways bullish on Black founders, a change of tune in how such entrepreneurs are usually considered.