Funding

OpenAI announces second round of AI startup fund

OpenAI said the startup fund initiative is its way of helping push the boundaries of applied AI in essential domains.

OpenAI has opened applications for the second cohort of its six-week program for artificial intelligence (AI) startups, Converge 2, through which it will invest $1 million into each of the 15 successful participants selected.

The organization behind ChatGPT announced that the initiative, accessible worldwide, is aimed at individuals like engineers, designers, researchers, and product builders utilizing AI for innovative purposes. OpenAI founded the startup fund on the idea that robust AI systems will fuel a new era of groundbreaking startups.

The rapid proliferation of AI tools and solutions has ignited support from industry experts and investors alike. Generative AI startups have received considerable funding from various companies and organizations in 2023 alone.

Bitcoin derivatives data points to traders' $50K BTC price target

Bitcoin bulls expectations of $50,000 and higher remain feasible according to BTC futures and options markets.

Bitcoin (BTC) price continues to trade below its 2023 high, a sign that investors may have underestimated the strength of the $44,000 resistance. Even as BTC price trades below $42,000, it doesn’t necessarily mean that reaching $50,000 and beyond is no longer possible. In fact, quite the opposite seems more likely to occur. Looking at Bitcoin derivatives metrics, it is clear that traders ignored the 6.9% drop and remained optimistic. However, is this optimism enough to justify further gains?

The $127 million liquidation of leveraged long Bitcoin futures on Dec. 11 may seem significant in absolute terms, but it represents less than 1% of the total open interest – the value of all outstanding contracts. Nevertheless, it’s undeniable that the liquidation engine triggered a 7% correction in less than 20 minutes.

On one hand, one could argue that derivatives markets played a crucial role in the recent negative price movement. However, this analysis overlooks the fact that after hitting a low of $40,200 on Dec. 11, Bitcoin’s price increased by 4.2% in the following six trading hours. In essence, the impact of forceful liquidation orders had dissipated long ago, disproving the notion of a crash solely driven by futures markets.

French startup Mistral AI closes $415M funding round

The French artificial intelligence startup Mistral AI closed a funding round worth around $415 million as it strives to be the EU’s rival to OpenAI.

French artificial intelligence (AI) startup Mistral AI has announced it raised €385 million ($415 million) in its latest funding round to develop its technology and open-source software.

Andreessen Horowitz and the company’s initial backers, Lightspeed Ventures, led the round, which closed on Dec. 11. This follows a previous funding round in June where Mistral raised $113 million in seed funding. The company is currently valued at around $2 billion.

Mistral AI focuses on open-source technology for generative AI tools, chatbot development and customizable features. It aims to make its products available to the general public in early 2024.

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Baton, Wormhole, Rokid, Saga, Bazooka Tango, Authentic and Intract are among the latest startups to secure venture capital funding.

November strengthened venture capitalists’ confidence in crypto and Web3 projects, with major funding rounds returning to the charts alongside seed capital for early-stage firms.

Cross-chain protocol Wormhole, for instance, secured a $225-million investment at a valuation of $2.5 billion. The round was led by Brevan Howard, Coinbase Ventures, Multicoin Capital, Jump Trading, ParaFi, Dialectic, Borderless Capital and Arrington Capital.

Another example of capital flocking to Web3 is Rokid. Backed by Temasek Holdings, the startup secured $112 million at a valuation of $1 billion for international expansion, targeting the next generation of virtual reality hardware solutions.

KuCoin pledges $20K grant to TON Foundation for ecosystem development

The funding will support TON ecosystem projects, research and development efforts, community-building and marketing activities.

KuCoin Ventures, the venture arm of Seychelles-registered crypto exchange KuCoin, will provide grants to The Open Network (TON) blockchain platform, including an initial $20,000, to support the growth and expansion of the TON ecosystem.

According to a Dec.

Ian Wittkopp, accelerator head at TON Foundation, said the grants from KuCoin aid them in continuing to support real-world blockchain solutions in payments and gaming within its ecosystem.

“Today’s partnership with KuCoin Ventures is an acceleration point in the momentum of mini-app development on the The Open Network… KuCoin Ventures’ efforts align with TON’s vision of a more accessible and decentralized digital future for everyone.”

Alicia Kao, managing director of KuCoin, attributed the move to the company’s belief in TON’s potential in the blockchain industry.

“This strategic alliance aligns with our mission of promoting further development of the crypto and blockchain industry through tighter cooperation.”

“We believe this signifies a fresh synergy between exchanges and the blockchain landscape, and we aspire that this joint effort will serve as a motivating example, spurring further similar ventures,” she added.

A KuCoin spokesperson told Cointelegraph that the partnership is in its first phase.

“This partnership is just the beginning. We plan to leverage this collaboration for deeper cooperation and communication… We are making all the necessary preparations for this… collaboration.”

Besides supporting the expansion of the TON ecosystem, KuCoin seeks to replicate its success with other blockchain collaborations “to facilitate the transition of cryptocurrency from a niche interest to mass adoption.”

Unchained raises $60M to offer collaborative custody Bitcoin services

Texas-based Unchained Capital hopes to undermine single points of failure and mitigate counterparty risk with its substantial $60 million raise, led by Valor Equity Partners.

The bear market grind has not deterred a $60 million raise from a Bitcoin-only company.

Unchained, a financial services provider for Bitcoin (BTC) holders, has announced a $60 million Series B funding round led by Valor Equity Partners. NYDIG, Trammell Venture Partners, Ecliptic Capital and Highland Capital Partners also participated.

Unchained Capital provides a more secure way to hold fees than storing crypto on centralized exchanges or on a single key solution. The custody model leverages the Bitcoin network’s native multi-signature capabilities in that clients share control of their Bitcoin between private keys they hold themselves and private keys held by Unchained or other financial services companies.

Multisignature solutions eliminate single points of failure and mitigate counterparty risk by sharing it between multiple parties. Simply put, compare the multi-sig process to a safe deposit box with two keys, one held by the customer and the other by the bank.

Single points of failure were a recurring theme during the 2022 crypto collapses: From BlockFi to Celsius to Three Arrows Capital, an array of centralized solutions collapsed, taking users’ funds along the way. Multisig radically reduces risk as no one party can run off with the funds.

The CEO of Unchained Capital, Joe Kelly, explained:

“Multisig is one of the most important technologies in the ecosystem that can be taken mainstream. It helps to protect individuals from loss and theft, two of the biggest issues for the industry.”

To date, Unchained secures over $2 billion in Bitcoin across thousands of keys globally. Casa, a competitor crypto security company, recently added Ethereum (ETH) to its suite of products.

According to the announcement, the $60 million in funding will be used to expand the client base and product offering further. Kelly told Cointelegraph:

“Using this fresh capital investment to expand our reach and suite of services, we hope to enable new entrants to Bitcoin to leapfrog centralized custodians into our safer collaborative custody model.”

Ultimately, the group will hope to further the mantra “not your keys, not your coins.” In light of centralized exchange collapses, greater numbers of Bitcoin and crypto enthusiasts learn to take custody of their assets, and multisig will undoubtedly play a greater role.

African blockchain ventures outpace global funding growth: Report

Africa witnessed a 429% YoY increase in venture funding in 2022, with the majority of funding coming from Seychelles and South Africa.

The African continent continues to be a fertile ground for the growth and implementation of blockchain technology.

According to the 2022 “African Blockchain Report” by CV VC, blockchain deals in Africa raised a total of $474 million in 2022, representing a 429% increase from the $90 million raised in 2021. This growth in funding far surpassed the global average, which only saw a 4% increase in blockchain funding.

According to the report, African blockchain funding demonstrated a growth rate that was over 12.5x higher than that of general African venture funding on a year-on-year basis. Overall African venture funding saw just a 34% increase, with $3.14 billion raised across 570 deals.

Africa experienced the highest growth rate in funding globally, while the United States remained steady at $15.2 billion in funding and Asia and Europe saw YoY increases of 50% and 35% with $4.74 billion and $4.88 billion in funding, respectively.

*African blockchain venture funding by countries. Source: CV VC*

Last year, Seychelles and South Africa were responsible for 81% of the blockchain venture funding in Africa, having raised $208 million and $177 million, respectively. Moreover, the total number of African blockchain deals increased by 12% YoY, from 26 to 29.

African blockchain venture funding made up 1.77% of global blockchain venture funding, which saw an impressive 407% YoY increase, with several countries contributing to the surge. By comparison, the U.S. concluded 137 deals while Asia and Europe had 84 and 78, respectively.

Nigeria was the frontrunner when it comes to the number of blockchain startups receiving funding, followed by South Africa, Seychelles and Kenya. However, despite Nigeria having the highest number of deals on the continent in 2022, it only accounted for 3.4% of all African blockchain venture funding, with an average deal size of $1.25 million.

Taking into account the substantial increase in blockchain funding in Africa and the fact that there was a relatively small increase in the number of blockchain deals shows that the median deal size has significantly risen. This suggests that businesses are securing more substantial funding and investors are becoming more confident in African blockchain ventures.

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Aleph Zero launches $50M ecosystem funding program

The Funding Program for the ecosystem involves grants, incubation, and acceleration for all phases of product development, with approved applicants receiving up to $500,000 per project.

Aleph Zero is launching a $50 million Aleph Zero Ecosystem Funding Program, the layer-1 privacy-enhancing blockchain announced on April 18. The nonprofit Aleph Zero Foundation overseeing its development of Aleph Zero aims to support developer teams to build on its platform and advance blockchain adoption globally.

In an interview with Cointelegraph, Aleph Zero co-founder Antoni Zolciak shared that “the goal of the Aleph Zero Ecosystem Funding Program is to fund innovations from developer teams that expand the capabilities, functionalities, and adoption of the Aleph Zero blockchain.” Zolciak also told Cointelegraph that the program would support various project ideas, from proof-of-concept to experienced teams with solutions on different platforms.

Aleph Zero wants to attract developers by providing comprehensive support that goes beyond just grants, such as assisting with business feasibility, regulatory compliance and community-building. The foundation seeks to offer access to a reliable partner network, as well asshare its own experience in building something from scratch. “We’re hoping to introduce a somewhat redesigned approach to how layer-1s can support builders and to go beyond simply providing grants,” said Zolciak.

The Ecosystem Funding Program comprises of grants, incubation and acceleration at all stages of product development, with successful applicants receiving up to $500,000 per project in grant funding. Additionally, grant recipients will gain exclusive access to Aleph Zero’s venture capital pool, infrastructure credits from Amazon Web Services and security design consultations from Kudelski Security. The Aleph Zero partner network will also provide marketing, branding, UX, product design and operational support as needed.

Speaking on the kinds of projects Aleph Zero is interested in supporting and the criteria for selecting grant recipients, Aleph Zero ecosystem lead Magdalena Oleksy told Cointelegraph that “the Aleph Zero Foundation is actively seeking to support a diverse range of projects that add value to the ecosystem. When selecting grant recipients, we consider the ability of the team to enhance network usage and adoption, their execution capabilities, and the uniqueness of the project.” Ultimately, the foundation seeks to encourage innovation and originality in proposals.

The program’s pilot phase has already produced a range of projects, such as decentralized lending and borrowing protocol Abax, NFT marketplace ArtZero, domain name service AZERO Domains, unique dark metaverse experience DRKVRS, enterprise-grade decentralized identity platform Gatenox and decentralized security platform Interlock.

Aleph Zero’s Ecosystem Funding Program is backed by long-term contributors to the project, including NxGen, Diamond Atlas Capital, BlackDragon, Necker Ventures, Hodl.nl and Hodl Ventures, Pragma Ventures, RR2 Capital, Cardinal Cryptography and Cardinal Ventures, Bellwether Rocks and Offbeat.

Despite recent ecosystem funding news, venture capitalist investment into crypto firms continued to fall in the first quarter of 2023. According to a report by Galaxy Research — the research arm of crypto investment firm Galaxy Digital — $2.4 billion invested by VCs throughout Q1 2023 was the lowest sum invested since the last quarter of 2020.

The report said that “Companies building in the Web3, NFTs, DAOs, Metaverse, and Gaming subsector raised the most deals, while Trading, Exchange, Investing, and Lending companies raised the most capital ($538m).”

VC investments have been falling since peaking at nearly $13 billion in Q1 2022, with the latest quarter’s results representing a decline of over 80% compared to the same to last year.

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SEC’s Gensler seeks $2.4B in funding to chase down crypto ‘misconduct’

United States Securities and Exchange Commission Chair Gary Gensler says the regulator is spread thin and needs additional funding to keep up with the “increased complexity in the capital markets.”

United States Securities and Exchange Commission Chair Gary Gensler has thrown his support behind U.S. President Joe Biden’s request to allocate a record $2.4 billion in funding for the regulator, highlighting the ongoing need to crack down on “misconduct” in the cryptocurrency industry.

In prepared testimony for the March 29 budget hearing with the House Appropriations Committee, Gensler said the additional funding was needed to keep up the pace of innovation, adding:

“Rapid technological innovation in the financial markets has led to misconduct in emerging and new areas, not least in the crypto space. Addressing this requires new tools, expertise, and resources.”

The additional funding would allow the SEC to hire 170 additional staff, most of whom would work within its enforcement and examination divisions, said Gensler.

The SEC chair said that the prior year’s budget increase allowed it to bring staffing levels above what it was in 2016 for the first time, but said the regulatory agency was still stretched thin, adding:

“As the cop on the beat, we must be able to meet the match of bad actors. Thus, it makes sense for the SEC to grow along with the expansion and increased complexity in the capital markets.”

Gensler again described crypto as the wild west, suggesting the nascent industry is “rife with noncompliance,” and that crypto investors were putting their “hard-earned assets at risk in a highly speculative asset class.”

According to Gensler, the regulator “received more than 35,000 separate tips, complaints, and referrals from whistleblowers and others in FY 2022,” which helped it bring more than 750 enforcement actions and “resulted in orders for $6.4 billion in penalties and disgorgement.”

Thirty of these actions were related to the crypto industry, which resulted in $242 million in monetary penalties and represents a 36% increase over the 22 actions announced in 2021.

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Animoca Brands cuts metaverse fund target to $800M: Report

The company announced in November 2022 that it was working on a new Animoca Capital fund with a target of $2 billion but then halved that target in January 2023.

Hong Kong-based Animoca Brands, a developer of blockchain gaming technology, has reportedly cut its target for its metaverse fund by a further 20% to $800 million, Reuters reported, citing sources familiar with the matter.

The blockchain gaming technology company reportedly scaled back on its billion-dollar goal due to volatility in the crypto sector. The company had previously announced in November 2022 that it was working on a new Animoca Capital fund with a target of $2 billion but then halved that target to $1 billion in January 2023.

In recent developments, people familiar with the matter shared that the company had once again reduced its target by another 20% to $800 million. Reuters shared that its sources preferred not to be named, as they had not been authorized to speak to the media.

Two sources reportedly disclosed to Reuters that Animoca’s market capitalization, which was previously valued at roughly $6 billion following a Temasek-led financing round in July 2022, has fallen to below $2 billion, with its shares trading at a considerably lower valuation in secondary markets.

The decreased fundraising target and declining valuation signal a change in sentiment on the crypto industry, as excitement around such technologies has dwindled following scandals ranging from the collapse of FTX to the bankruptcy of several crypto lenders.

In 2022, Animoca Brand was named the most funded metaverse developer by Nasdaq, with Animoca having the most metaverse deals in 2022, closing 15 deals and receiving over $564 million in funding.

Animoca, as a prominent player in the metaverse industry, holds a majority stake in The Sandbox, a leading metaverse platform. Apart from this investment, the company has actively participated in developing nonfungible tokens (NFTs) and GameFi. According to Yat Siu, one of Animoca’s co-founders, GameFi is expected to become one of the main gateways for the general public to access the metaverse.