HashKey Capital, the digital assets and blockchain arm of Chinese conglomerate Wanxiang Group, was recently named by The Block as among the world’s most active venture capital firms in the crypto space.
Hong Kong’s Web3-focused asset manager was featured in The Block’s Digital Asset Funding Landscape report. The report covers the state of the market, investment trends, decentralized finance, blockchain gaming, and other cryptocurrency sectors to watch for in 2023.
HashKey Capital was named as one of the biggest backers of crypto projects, ranked alongside VC firms such as Animoca Brands, Alameda Research, Polygon Studios and Shima Capital. Since its inception in 2018, HashKey Group has invested in some of the world’s biggest blockchain projects dealing in brokerage, custody, and staking. With more than $1 billion in client assets, its notable investments include cross-chain protocol Polkadot, crypto lender BlockFi, decentralized finance protocol Terra, non-fungible token and metaverse fund Animoca Brands.
The company, which is led by early Ether investor Deng Chao, also backs privacy tool Mask and blockchain node infrastructure provider Blockdaemon, amongst many others.
Pulling from The Block’s database of venture capitalist deals, mergers and acquisitions activity, investors and crypto companies, this report shows insights from investment activities in 2022. The report brings meaningful insights into the trends over the past few years and what VCs concentrated on in 2022.
One of the major takeaways from The Block’s report is that venture capitalists in 2022 nearly matched the $31 billion they invested in the previous year. The NFT/Gaming category accounts for 1,364 deals, around 21% of the total. Most of the investments were made in 2021, when macro and crypto market conditions led to significant interest in the space, the report found.
NFTs/Gaming popularity over the past year and a half poured into the M&A markets, where its M&A transactions increased roughly 224% from 17 transactions in 2021 to 55 in 2022.
The Web3 sector was another fast-growing segment in 2022, where it matured from a nascent community to a budding industry with the number of funding deals has risen steadily over the past three years.
“Venture Capital has been a major driving force behind the rapid development of digital assets. In the last six years alone, over 6,000 VC deals were closed. We believe that this trend will continue and despite the bear market, significant capital (from around the globe) will gather here and when the next cycle comes, these investments will pay off. The Block’s report provides a comprehensive analysis of these deals and a reference to understanding the crypto industry over the past six years.” said Deng Chao, CEO of HashKey Capital.
Despite a drawdown in each quarter throughout 2022, in aggregate, there was 974 VC deals for infrastructure, followed by DeFi at 918, Crypto Financial Services (CFS) at 903, Enterprise at 745, Web3 at 696, Trading/Brokerage at 519 and Data/Analytics/Information (DAI) with 261 deals.
Regionally, North America was the most dominant contributor of global venture investments. U.S.-based projects raised 2,423 deals, accounting for almost $38 billion of the total amount raised in the sector. In Europe, the number of deals raised has grown steadily since 2019 due to a more favorable regulatory climate that emerged that year. Meanwhile, Asia has emerged as a hub of NFT/Gaming projects, especially in India, where 139 projects closed on funding rounds in the last 30 months.