An impending crypto startup slowdown
Paul Veradittakit, general partner at crypto-focused Pantera Capital, is beginning to see signs of deceleration in the funding of crypto startups, he tells Lucinda.
Why it matters: This space was a bright spot for investors through the first quarter, while other tech segments saw a funding slowdown. Now, cracks are forming for startups and VCs.
State of play: "I've seen a little bit of a slowdown. We're probably seeing a little bit more of a slowdown in growth, both for companies and also for funds," says Veradittakit.
Background: Pantera — which has made investments in the likes of CoinDCX, Circle, Coinbase and FTX — possesses one of crypto's handful of mega funds that can invest from early stage to growth. It is now nearing the close of a $1.3 billion fund.
- "Growth stage companies are going to have a harder time right now, especially because not many crypto funds can do growth right now," he says.
Details: Verradittiakt says the he believes that funding constraints are starting to affect even early-stage companies.
- Seeing the macro environment, "companies [are] saying, 'Oh man, I have to bring down my valuation a little bit.'"
- "Even though early stage investors are willing to invest right now," he adds, "they don't want to be investing at the same prices that they were a couple of months ago, so they're starting to apply some sort of discount right now, too."
Bottom line: Veradittakit says he believes expectations will adjust in the next two or three months and eventually go down.