2021 Was a Record Year for Coinbase Ventures’ Investment Portfolio

Updated by Andrew Rossow
In Brief
  • Coinbase Ventures released its annual review report for 2021, showing an average of 2.5 deals every day.
  • In deploying nearly 90% of its capital, it completed 150 deals in the year.
  • Nearly 50% of its investment centered around DeFi and CeFi.
  • Venture capitals cumulatively invested around $30 billion into the crypto space in 2021.
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Coinbase Ventures, the investment arm to Coinbase, had a record year in 2021, deploying 90% of all its capital and signing a new deal every 2.5 days.

Serving as the investment arm to its leading US-based crypto exchange, Coinbase, Coinbase Ventures has become one of the most active corporate venture funds in operation, continuing to incentivize entrepreneurs and projects from around the world, setting waves towards Web3 and the digital currency spaces.

With an average new deal every 2.5 days, Coinbase Ventures had a record year in 2021, with just under 150 deals, according to its newly released annual review report.

Source: Coinbase

Nearly Half of Coinbase Ventures’ Investments Were DeFi & CeFi

A breakdown of the investment arm’s funding reveals that nearly half of the crypto exchange’s funded projects for 2021 were centered around DeFi (23%) and CeFi (23%). Undoubtedly, DeFi recorded major growth in 2021 as the public began to use smart contract-enabled protocols to carry out services being performed by traditional financial institutions.

DeFi

The space, at some point saw its TVL rise to as high as $259 billion. Per the report, Coinbase Ventures’ investment in DeFi was mostly for projects in the Ethereum ecosystem, including Layer 2 environments such as Arbitrum and Optimism – but it also funded projects on other non-EVM blockchain networks including Solana, Polkadot, NEAR, Algorand, and Cosmos.

Certainly, DeFi made a great name for itself in 2021, which is why Coinbase Ventures says it prioritized user protection, supporting DeFi insurance financial protocols like Neptune Mutual, Risk Harbor, Cozy Finance, and Nayms. The report acknowledges the prevalence of hacking and the necessity of data incident response plans as smart contracts continue to evolve.

CeFi

Still, the need for localized platforms that serve as what Coinbase Ventures calls “onramps across distinct regulatory, banking, and infrastructure regimes,” is present, opening the investment doors to crypto-financial service providers in LatAm, Pan-Africa, MENA, South Asia, Europe, and North America.

NFTs and the Metaverse

Leaving 2021 with a $25 billion valuation, the NFT space illuminated the capabilities of marketplaces like OpenSea and Rarible, with successful projects such as Bored Ape Yacht Club and CryptoPunks – while simultaneously, shedding light on the play-to-earn gaming ecosystem as well as the continued emphasis on the metaverse.

While Coinbase has distanced itself from the activities of Coinbase Ventures, investments by its venture arm could open pathways for some of the firm’s future plans. One of such plans is the proposed Coinbase NFT platform, which seems almost ready. 

Recently, Coinbase Vice President of Products, Sanchan Saxena, shared previews of the marketplace and elaborated on some features that would be available on the platform.

Although the NFT platform would be cross-chain, it’ll start on Ethereum, which remains the home of NFTs despite the heightened competition from other blockchains. 

Coinbase Ventures’ influence within the network may come into play as it has already made significant investments in NFT projects. With the launch of this marketplace, it’ll likely seek to capitalize on these investments to gain an advantage over competitors in the space.

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