Varun Datta, Truth Ventures CEO – Web3’s Funding Boom Is Over. That Could Be Good News for Founders

It would be difficult to describe crypto venture capital as being in a funding drought. Investors deployed approximately $5.7 billion into crypto and blockchain companies during the second quarter of 2026, according to Galaxy Research, an increase of 31% from the previous quarter. What has changed is where that money is going and what founders increasingly have to demonstrate to get it. Nearly 80% of the capital invested during the quarter went to later-stage companies. Crypto startup valuations have also fallen sharply from their highs in the final quarter of 2025, while raising new crypto venture funds remains difficult. Galaxy recorded only five new funds during Q2, the lowest quarterly number for several years. September continued the mixed picture. FinDaS recorded $1.05 billion across 48 Web3 funding rounds, compared with a preceding 12-month monthly average of $2.01 billion and almost 67 rounds. Capital is clearly still available, but what appears to be disappearing is the assumption that a promising Web3 company should be able to raise it easily. I think that could ultimately produce better companies. Varun Datta, venture capitalist and CEO of Truth Ventures, explores why to...