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 company’s withdrawal in the midst of an economic downturn.
2021, web3 startups worldwide raised a record $29.2 billion. By 2022, that number had dropped to $21.5 billion, though that’s still far more than the total $4.8 billion and $4.2 billion such companies raised in 2020 and 2019, respectively.
Black people who invested in crypto were disproportionately affected hard over the winter, though many black founders and investors who spoke to businessupdates.org 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 businessupdates.org.
“Bubble had to pop,” co-founder of People of Crypto Simon Berry said. “It was not sustainable and economic correction was needed. The downturn removed the bad actors who only entered the space for quick dollars. It created an opportunity to get out of the hype cycle and paved the way for development that ensures the growth of the ecosystem in a sustainable way and adds value.”
Pryce Adade Yebesi, the co-founder of Utopia Labs, agreed. “This period was a justified consequence of a period of rampant speculation and disagreement,” he told businessupdates.org. “This is going to be a good time to focus. Coming back to the reality of solving the world’s ubiquitous problems; it’s an important change of pace for space.”
Funding for the founders of Black web3 has only increased and the crypto winter proved to be the most fruitful year. Crunchbase data shows US Black web3 founders raised $60 million (out of $11.9 billion given to all US web3 startups by 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; notice the disappearing thin red line in the chart below. In 2019 and 2020, Black web3 founders raised $2.5 million and $4.5 million 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, though it is quite telling that Black web3’s founders were able to raise record amounts amid an overall dip in the web3 funding market. It seems investors are optimistic about black founders in some ways, too, a change of tone from how such entrepreneurs are usually viewed.