A new report from CB Insights has shown that funding investments in bitcoin and blockchain technology startups amounted to $550 million compared to almost no investment in 2012.
According to CB Insights, post-2012 total funding has risen five percent, from $524 million in 2015 to $550 million in 2016. Yet, while some may consider this a small increase, the total funding amount has increased significantly from 2012 figures.
Then only five deals, amounting to $1.3 million, were achieved. However, this was followed by two years of increased investments with 143 deals and $357 million invested in 2014.
Drop in Bitcoin, Blockchain Investments
And yet, while there has been a rise in funding from investors keen to develop bitcoin and its underlying technology, the blockchain, during 2016, the number of investments fell below 2014 levels.
In 2016, investors made 132 investments in bitcoin and blockchain companies, less than the 143 deals made in 2014. This was also an 18 percent drop in 2015 figures which saw 161 investments made.
In 2016, there were four $50 million+ funding rounds. These were Circle ($60 million, Series D), Digital Asset Holdings ($60 million, Series A), Ripple ($55 million, Series B), and Blockstream ($55 million, Series A).
Yet, 21 and Coinbase still lead when it comes to the largest financings after they closed $111 million and $75 million rounds, respectively, in Q1 2015.
Even though Q1 2016 witnessed the biggest total funding in any quarter last year, with 45 deals amounting to $175 million, it was then followed by a decrease in investments for the rest of the year. Q4 2016 ended the year with 29 deals totaling $87 million.
Some of 2016’s biggest deals came from the likes of Digital Asset Holdings, Blockstream and funding rounds from Gem, Symbiont, and Simplex.
Given the sector’s youth it’s still maturing; however, the fact that it has increased funding from $1.3 million in 2012 and $550 million in 2016 illustrates how far the industry has come over relatively little time.
What’s more the sector still has space to grow, which could indicate that further investment will only increase with time.
Canada is one such country that experienced an increase in funding last year. Venture capital funding reached $137.7 million in 2016 compared to $21.8 million five years ago and $7.3 million in 2000.
And yet, while the U.K. is still considered the lead FinTech hub, total venture capital funding is reported to have dropped slightly in 2016; however, investment in FinTech was unaffected.
Of course, one thing remains, interest in bitcoin and its distributed ledger will continue to grow, which means that funding will too. While some years may experience a drop in investments other years will experience a rise.
Considering the distance it’s come so far may be indicative of what we can expect in the future.
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Last modified: March 4, 2021 4:54 PM