Crypto Venture Capital Investment

August 30, 2018


Crypto venture capital investment expected to hit a record high in 2018

Neo versus Ethereum

In recent years, ICO and cryptocurrency prices have taken center stage in the crypto news. For this reason, venture capitalists interest in investing in cryptocurrencies has surged. The past two years saw 179 US investors take part in at least one venture capital deal for a cryptocurrency startup, as revealed by PitchBook. The figures suggest a likely increase in the number of crypto venture capital investment directed towards fintech start-ups and blockchain technology in 2018.

ICOs are increasing by the day, with many new companies entering the market and introducing their unique digital currencies. The latest information published on our website disclosed that there were 902 ICOs last year. Cumulatively, the ICOs raised a little over $5.6 billion. This is quite justifiable, owing to the craze associated with Bitcoin, and its market capitalization that continues to surmount the cryptocurrency list.

Crypto venture capital investment surpassed $1 billion in 2017

Venture capitalism, although much less outspoken, is a major player in the cryptocurrency and ICO investments. According to recent statistics, funds from venture capitalists in 2018 are already above 40% of 2017’s high water mark. This is evidence that financial institutions are confident in investing in cryptocurrencies as they are assured of their advancement and development.

According to PitchBook Platform, 2017 saw the highest number of crypto venture capital investment recorded at over $1 billion. In contrast, $400 million has already been invested by capitalists only two months into 2018. Clearly, the cost of Bitcoin, the biggest cryptocurrency in the world, has been fluctuating. However, this wasn’t in the least bit impacted the interest of capitalists in cryptocurrencies, blockchain or ICOs. We are most certainly going to see last year’s numbers bested, possibly around mid-year.

Big money fundraisers


Even with the ICO craze of 2017, many cryptocurrency startups are landing substantial venture funds. These comprise Coinbase’s $108.1 million Series D funding, BitGo received a $42.5 million Series B run by Valor Equity Partners and Bit Pay fundraised $30 million Series B run by Aquiline Technology. 2018 has raised its share to $18 million dollars put into Russian based QUASA, and another $10 million invested in Harbor Platform along with many others.

Among the top investors is Digital Currency Group which closed 14 investments between 2017 and February 2018. Right behind them are Blockchain Capital and Plug and Play, each with 9 deals. Interesting to note is that the list comprises both mainstream investors and small accelerator programs like Plug and Play (3rd) and TechStars (8th). This shows that even small investors have a lot of interested in the blockchain technology and the services that implement it.


US and UK accounts for more than half of ICOs in 2017

Of the new blockchain startups in 2017, over 55% of them were based in either the USA or UK, with the US-based fintechs accounting for over 38%. However, the figures show that not all countries are confident about investing in blockchain technology. This is because cryptocurrency transactions have not been legalized in most nations; hence blockchain related startups remains localized to only a few regions.

Many investors and venture capitalists consider Japan and Singapore as the most preferred Asian countries for startups. Both markets boast friendlier cryptocurrency environments and ease of market trends when compared to other Asian countries. With regards to ICO market share, the biggest piece of the pie already taken by the USA and UK. Countries like Malaysia, Singapore, Hong Kong, Switzerland, and Japan are aiming to close the gap. Switzerland is especially guiding Europe towards the growth of the blockchain technology. Its financial authority is encouraging startups related to blockchains and companies setting up ICOs.

All this goes to show that for startups related to blockchain and cryptocurrency to flourish, the individual country has to be receptive to them. With around $400 already invested in cryptocurrency, the numbers might hit $3 billion by end year.



By Felix Kingstone

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The Future of ICO Investment

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