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Fred Dunkley

Fred Dunkley

Writer, Safehaven.com

Fred Dunkley is a tech analyst, writer, and seasoned investor. Fred has years of experience covering global markets and geopolitics. 

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Crypto Startup Investment Reaches New High

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The SEC may finally be casting a wide net in investigating initial coin offerings (ICOs), and cryptocurrencies may have had a rough start to the new year, but that doesn’t mean that venture capital has lost interest …

In fact, the opposite is true, according to Crunchbase data: As of the first two months of 2018, venture capital fundraising into crypto had reached more than 40 percent of its entire 2017 high.

In other words, while venture capitalists poured over $900 million into blockchain and related companies last year, this year already investment has hit close to $400 million—and we’re only two months into the year. 

Sheer dollar volume tells an interesting story, according to Crunchbase data:

(Click to enlarge)

One of the biggest so far this year was Ledger, the France-based cryptocurrency wallet-maker, raised $75 million in Series B funding, which it plans to use to scale its business further.

And the up-coming list is growing almost daily. Comcast Ventures is taking things even further by investing in blockchain startups that … invest in blockchain startups, according to Coindesk.

In February, following in the footsteps of IBM and Boldstart Ventures, Comcast Ventures backed mState—an investor in startups building enterprise blockchain solutions.

The list of VCs jumping on the crypto bandwagon is wide and varied—but not geographically. They are led by the United States with 38 percent, followed by the United Kingdom (8 percent), Singapore (4 percent) and Switzerland ( 4 percent).

Again, it’s Crunchbase with the only data set:

(Click to enlarge)

And these country venues are likely to field even higher numbers as the year progresses, partly due to the Chinese regulatory crackdown. Related: Billionaire Investor Bails On Stocks, Favors Cold Hard Cash

Switzerland, for its part, is trying to become “crypto valley”, the new name for the Canto of Zug, just outside of Zurich, where even the city council takes Bitcoin as payment from residents.

It was practically inevitable, when Ethereum creator Vitalik Buterin chose Zug as his home in 2014. Since then, it’s continued to attract more and more to its crypto scene.

Still, ICOs beat venture capitalism every time for getting money into blockchain. There were over 900 ICOs last year, raising over $900 million. Dollar for dollar, ICOs are raking a lot more in, but changing regulatory environments may give traditional venture capital (convertible notes seed, angel, Series A, Series B) a leg up in the future.

There might not be as many ICOs as there are venture capital deals in this space, but dollar values are a lot higher in the former, says Crunchbase.

(Click to enlarge)

The crypto news outlet holds that traditional venture capital has dumped $1.3 billion into blockchain and related companies over the past 14 months, compared to ICO fundraising of $4.5 billion during that same time period.

By Fred Dunkley for Safehaven.com

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