GM and welcome to Dove Dispatch #37!
Today, we are digging into the Polkadot fundraising ecosystem.
Two things before we get into it:
Dove Metrics’ Regan Bozman published some thoughts last week on what types of Web3 products will find mainstream adoption.
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Polkadot was founded in 2016 by Parity and the Web3 Foundation (both founded by Gavin Wood). The “Layer0 protocol” raised more than $140M in a 2017 ICO and relies on parachains, whose auctions winners are just starting to produce blocks, setting Polkadot’s sharded ecosystem into motion for the first time.
With that launch, developers can now double down on building out Polkadot’s ecosystem — there are now more than 180 Substrate-based projects.
Interestingly, according to Messari, Polkadot is the top liquid asset owned by VC funds: 39% of their tracked funds have a vested interest in Polkadot’s success.
Right after DeFi Summer, some prominent investors like Paul Veradittakit from Pantera Capital were already bullish on DeFi on Polkadot, investing in Acala, a decentralized financial hub built on top of Polkadot. But what has happened since then?
If we exclude the rounds for which there is no available data on the funding amount, Polkadot projects raised more than $306M since January 2021, across 74 deals. March 2021 was an outstanding month with 20 deals and more than $58M raised.
Polkadot projects raised $4.7M on average, compared to $1.7M for Arweave, $2.6M for BSC, $6.6M for Celo, $11M for Ethereum, and $13.3M for Solana.
Even if 86% of the rounds were earlier than Series A and on average, Manta Network, SubQuery, and Parallel Finance, are all well-known Polkadot projects which raised Series A funding rounds in the last 12 months.
Unsurprisingly, DeFi is the number one category in the Polkadot fundraising ecosystem, but NFTs is a growing category with projects such as PolkaPet, RMRK, and PolkaRare leading the charge.
Polkadot represents 8% of the DeFi rounds when we include Ethereum, and 16% of the fundraises completed by alternative Layer-1s.
In 2019, the Web3 Foundation launched Polkadot grant programs which have allowed more than 300 early projects to receive funding.
In October 2019, Polkadot announced the first-ever Polkadot-focused fund, operated by Polychain. Since then, more than $310M has been specifically raised for the Polkadot ecosystem. In 2021 only, Master Ventures and Digital Finance Group created dedicated investment vehicles, betting on Polkadot's scalability and interoperability innovations. Other top funds such as Zee Prime Capital have also been investing a lot in the Polkadot landscape.
Just before the parachain auctions start, Polkadot also unveiled a $770M ecosystem fund to “build, improve, educate” Polkadot’s ecosystem.
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