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Investment in European crypto startups defied the 2022 bear market


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The crypto industry in Europe defied the bearish trends of 2022 and saw a record level of funding. Startups in the crypto space raised over $5.7 billion in 2022 while global and U.S. venture funding in the industry contracted. This is a notable increase from the $5 billion E.U. companies raised in 2021.

crypto startup investment
Chart showing VC investment in European crypto startups from 2016 to 2022 (Source: RockawayX)

According to data from RockawayX and Dealroom, Europe has the largest number of startups working on blockchain and crypto solutions — surpassing both the U.S. and Asia. The majority of them are early-stage, small-to-mid-sized companies with modest funding. Further along the startup funding journey, the U.S. leads the way as it has the largest number of unicorns.

european crypto startups
Chart showing the number of crypto startups by location in 2022 (Source: RockawayX)

While European companies accounted for 20% of the total global early-stage crypto startup funding, U.S. companies dominated funding rounds exceeding $100 million.

european crypto startups vc
Chart showing crypto VC investment by location and round stage in 2022 (Souce: RockawayX)

In 2022, crypto VC funds collectively raised over $35 billion, pushing crypto companies into the forefront of venture capital. Despite $35 billion accounting for only around 16% of the total VC fundraising last year, it still represents the highest amount ever raised in the industry.

european crypto startups vc fundraising
Chart showing global crypto VC fundraising and fund count from 2017 to 2022 (Source RockawayX)

The ongoing bear market is yet to scare investors. Viktor Fischer, the CEO of RockawayX, said that every market cycle — be it a bear one or a bull one — increases VC activity.

“In the past, VC funding remained relatively stable, or even moved counter-cyclically, during crypto price downturns. Investments made when digital asset prices were depressed materialized in tech and usage traction alongside “bull market” price recoveries.”

Fischer noted that some of the most notable companies in the crypto space today — including Uniswap, OpenSea, Dapper Labs, and Sorare — were funded and launched during the 2018 crypto winter.

Samantha Bohbot, RockawayX’s chief growth officer, said that the biggest difference between investing in bull markets and investing in bear markets is the speed of execution.

“As investors, we see the slowdown change the way deals play out.  Where fundraises were once fast — oversubscribed and frantically closed, sometimes in days after the process kicks off — raises often stretch months now.”

While decentralized finance (DeFi) saw a 120% increase in the amount raised, centralized finance (CeFi) still leads the way when it comes to VC investments.

Chart showing VC investments in crypto financial services in 2022 (Source: RockawayX)

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