Trammell Venture Partners (TVP), based in Austin, Texas, has unveiled its second annual findings from its in-depth research into the burgeoning Bitcoin-native startup and venture capital ecosystem.
Despite a notable downturn in crypto venture market investments throughout 2023, TVP’s research highlights a remarkable surge in the Bitcoin startup sector, particularly at the Pre-Seed stage, with a striking 360% year-over-year rise in transaction count.
Contrary to the broader startup landscape experiencing a decline in exit activity to a 10-year low in 2023, Bitcoin-native startups showed resilience and growth, marking a 69.2% increase year-over-year. TVP’s data revealed that these early-stage Bitcoin startups collectively raised nearly $1 billion between 2021 and 2023, signifying a substantial interest and investment in this sector.
Christopher Calicott, TVP’s managing director and founding partner, commented on the findings, noting a strong desire among founders to build on Bitcoin. He highlighted the increasing support infrastructure and technical advancements that are fueling innovation within the Bitcoin ecosystem.
“The early indicators from the TVP research are in line with the expectations we have had for ‘crypto’ venture’s end state: founders really want to be building on Bitcoin specifically,” said Calicott. “With a rapidly growing array of tech enablements fueling enhanced scalability and buildability on Bitcoin, this long-held TVP hypothesis is becoming an evidence- and data-supported reality.”
In 2023, Bitcoin-native venture deal count grew significantly, rising 69.2%, while broader crypto venture deal counts were down 35.3%. Though with the increase in Bitcoin-native venture deals, crypto venture deals still account for the overwhelming majority of deal count and venture dollars invested.
“Due to cyclicality and bitcoin’s institutional embrace, its market cap dominance is even greater than at the time of our 2023 report,” Calicott continued. “Despite this, allocation to Bitcoin-native venture capital remains very low, relatively speaking. We believe that delta will begin to close as more allocators start to see the compounding benefits from a rapidly expanding design space on Bitcoin thanks to these early-stage Bitcoin startups.”
TVP’s commitment to driving insights and research for the venture capital landscape led to the launch of the industry’s first dedicated Bitcoin-native ecosystem-focused fund series in 2021. This annual release of TVP’s Emerging Bitcoin-Native Venture Capital Landscape Research Brief aims to provide valuable data and support for institutional investors looking to explore opportunities within the growing Bitcoin startup sector.
The full TVP Bitcoin startup ecosystem research brief is available for download, offering a comprehensive overview of the evolving landscape and investment opportunities in Bitcoin-native technologies.