Global Blockchain & Cryptocurrencies investment increased almost four-fold since 2015

Global Blockchain & Cryptocurrencies volume of deals hit a five year high of 161 transactions in 2019

  • Blockchain & Cryptocurrencies companies collectively raised over $14.2bn in global investment across 641 transactions since 2015. The slowdown in the subsector’s investment in 2019 occurred at the same period when major Cryptocurrencies traded way below their historical peaks.
  • The subsector has been maturing through the period, with more investors funding later stage rounds. This is most notably seen in the amount of global funding in deals valued at $50m and above, which has increased 4.6x between 2015 and 2019.
  • Global investment experienced a decrease by more than half in 2019 compared to the previous year. The main reason for this was that investment in 2018 was abnormally high compared to historical levels. The driver of 2018’s large global investment was an extremely large transactions valued at $4.1bn, which was raised by a Blockchain company (Block.one). Block.one’s large funding round contributed to over half of the total global investment in the Blockchain & Cryptocurrencies subsector that year.

Investment in medium-sized deals between $5m and $50m has more than doubled since 2015

  • The Blockchain & Cryptocurrencies subsector experienced an increase in the number of deals valued between $5m and $50m by 22.9pp since 2015. Supporting the earlier statement that globally the subsector has become more mature throughout the period.
  • The frequency of early stage rounds has declined between 2015 and 2019, which indicates that startups are becoming less common. The drop in the volume of deals valued at less than $1m by 20.7pp supports this. An explanation for this could be that the Initial Coin Offerings (ICO) Hype in 2017 pushed down the smaller valued transactions share of deal activity.
  • Originally in 2015 the number of deals valued at $50m and above amounted to four transactions, this increased since 2015 to nine transactions in 2019. Demonstrating that globally Blockchain & Cryptocurrencies companies are expanding their operations or experiencing internal growth during this period.

North American companies almost captured two thirds of all Blockchain & Cryptocurrencies investment since 2015

  • Blockchain & Cryptocurrencies companies based in North America received 63.1% of global investment in the subsector between 2015 and 2019, amounting to $8.9bn. KPMG stated that the Blockchain subsector is experiencing major growth in the US. The rise in the subsectors investment was due to its widespread applicability of blockchain in increasing the efficiency of the financial sector.
  • Asian companies in the Blockchain & Cryptocurrencies subsector captured 25.6% of global investment amounting to over $3.6bn. The Asian region has captured a strong share of investment due to their technologically savvy population and an adaptive technological environment, which makes it attractive for investors. Furthermore, there is high demand for cryptocurrencies like Bitcoin in order to avoid the extra costs from the currency controls set in China.
  • The Rest of World category contains Australasia, Middle East & Israel, Latin America, and Africa which collectively accounted for 1.5% of global investment in the subsector.

Half of the global top 10 Blockchain & Cryptocurrencies deals were raised by US companies

  • The top 10 Blockchain & Cryptocurrencies deals collectively raised over $1.7bn, with half of the deals being raised by US companies (Bison Trails, Anchorage, Layer1, Coinbase CBT, & Figure).
  • Bitfinex, an Asian cryptocurrency exchange company, raised $1bn in an initial coin offering round in May 2019, which was the largest deal raised by a Blockchain & Cryptocurrencies company. The company will use the funding to cover their operating assets that were frozen throughout an investigation into third party payment processor.
  • Figure, a US blockchain lending company, raised $103m in a series C round led by Morgan Creek Digital in December 2019. The company plans to use this investment to further fund their objective of leveraging blockchain to reinvent lending and investing for clients and financial institutions.

The data for this research was taken from the FinTech Global database. More in-depth data and analytics on investments and companies across all FinTech sectors and regions around the world are available to subscribers of FinTech Global. ©2020 FinTech Global

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