Investors chary of bets on crypto, Web3 startups

Threat of Global Slowdown

- Startups in edtech, cypto using this emerging tech

- Blockchain, Web 3.0, Metaverse created a lot of buzz

- Billions flowed into such Web 3.0 startups

- Indians lost a lot of wealth in recent crypto crash

Bengaluru: Amid dry spell in funding, investors are taking a cautious stance in Web 3.0 and related technology-run startups. According to sources in the know, setbacks in some Web 3.0 related startups and fall in crypto value seem to be the reasons for such slowdown.

"There are some setbacks in the crypto space. Web 3.0 was going really good with firing from all cylinders. But if bitcoin is crashing, there has to be some impact. With Terra going down, there has to be a big impact. When billions of dollars get wiped out in couple of days, it became a huge thing. So, investors do higher due diligence," said Navin Rungta, Founder of eLagaan, told Bizz Buzz.

Blockchain, Web 3.0 and related technology domains like Metaverse have created a lot of buzz with billions flowing into such startups. However, crashing of cryptocurrency values have made investors cautious in recent days. Also, anticipation of economic slowdown globally is prompting investors to conduct more due diligence before committing money.

With fall in cryptocurrencies, Indian crypto exchanges have seen exit of participants in recent months. Indian investors have lost a lot of wealth in the recent crash of Luna and subsequent delisting from crypto exchanges. Sources in the know said that Luna was among the most popular digital currencies among Indian investors.

Apart from such volatility, 30 per cent taxation on crypto earnings and lack of regulations are also making investors cautious on this space.

Similarly, controversies related to InvactMetaversity have also not gone down well among investors' community. Former Twitter India head Manish Maheshwari, who launched edtech start-up InvactMetaversity six months ago, had stepped down from the firm as its CEO and director after differences with cofounder Tanay Pratap.

"These kinds of episodes indicate that the initial growth projected by the industry participants are not being reflected in numbers," said a source who watches Web 3.0 space closely.

Interestingly, despite crash in cryptocurrency and other digital assets, global investors continue to remain bullish on Web 3.0-related opportunities. California-based investment firm Andreessen Horowitz (A16Z) has announced launch of two funds worth around $5 billion to invest in crypto and Web 3 opportunities.

Currently, Indian startups in edtech, gaming technology along with cryptos are using this emerging technology. With a large user base of internet, the country is seen as one of the crucial geographies to drive future growth.