AI companies are beating out crypto when it comes to VC funding.Still, crypto startups raised $37 million this week.<\/p>\n
Artificial intelligence companies are leaving crypto startups in the dust, founders warn.<\/p>\n
Paul Brody, the former EY global blockchain lead turned CEO of Nightfall Networks, told DL News that it’s a bad time for crypto teams trying to raise capital.<\/p>\n
That\u2019s because AI companies are growing so quickly that expectations for new startups have risen sharply, he said.<\/p>\n
\u201cWhat used to be seen as strong early performance \u2014 around $2 million in first-year revenue \u2014 is no longer enough,\u201d Brody said. \u201cNow, investors expect closer to $4 million.\u201d<\/p>\n
In other words, that surge in expectations is making it harder for crypto startups to compete for funding.<\/p>\n
Still, Brody sees some room for optimism.<\/p>\n
\u201cThe one silver lining is that at least some VCs are sitting back and saying, gee, we have an awful lot overcommitted to AI,\u201d he said. \u201cMaybe we need a little bit of other things in our portfolio.\u201d<\/p>\n
And fundraising data from this week backs him up. Venture investors poured in nearly $37 million into crypto startups, DefiLlama data shows<\/a>.<\/p>\n Here are the top three raises this week.<\/p>\n BetHog, $10 million<\/p>\n Edinburgh-based crypto casino BetHog raised<\/a> $10 million in a Series A round, bringing its total funding so far to $16 million.<\/p>\n Will Ventures and RockawayX led the raise. Bullpen Capital, 6th Man Ventures,, and Advancit Capital also backed the round. The company was founded by Nigel Eccles and Rob Jones, the team behind FanDuel.<\/p>\n The company said that the funding will support Sentient Studios, a new business that lets casinos use AI-powered virtual dealers instead of human staff.<\/p>\n Hata, $8 million<\/p>\n Hata, the Malaysian crypto exchange, raised<\/a> $8 million.Bybit led the round with support from global family offices. It follows a $4.2 million seed round in 2025, also backed by Bybit.<\/p>\n Hata says<\/a> it holds licences from both Malaysia\u2019s Securities Commission and the Labuan Financial Services Authority.<\/p>\n The platform has grown quickly, reaching over 200,000 users, according to the company.<\/p>\n Kaio, $8 million<\/p>\n