While ICOs have raised an estimated $11B in 2018 alone, we wanted to highlight the investments into teams, companies and technologies as opposed to in tokens which may or may not have any actual utility or value.
This should be an encouraging reminder that amidst the FUD and noise, real projects are getting funded regularly. And as with all traditional venture capital investments, the crypto space is seeing funding go to strong teams, big ideas and growth plans, and demonstrable history of execution.
Venture Capital Investment into Blockchain and Crypto Projects - up 280% from last year
According to a study published on Diar, almost $4 billion in VC capital in 2018. Both the volume of deals as well as the median valuation of companies getting funded is on the rise - a sign of a maturing industry as a whole.
The most active investors in the space include Barry Silbert’s Digital Currency Group (DCG) was “by far” the most prolific investor from the VC sector, closing over 110 deals in the crypto and blockchain space this year. DCG outflanked both Blockchain Capital and Pantera Capital, whose combined deals clocked in at 100.
Other strong investors included VC firms Andreessen Horowitz, Danhua Capital, and Future Perfect Ventures, alongside “active angels” Tim Draper, Naval Ravikant, Roger Ver, and Barry Silbert.
Select Investments into Crypto Projects in 2018
- Nomics: A Crypto data startup that in December of 2018 secured $3 million in funding from investors including Coinbase Ventures. Their mission is To grow the decentralized financial system by making it accessible and understandable to data-driven investors - particularly for funds and exchanges.
- BitGo: Raised over $75MM in a 2-phase Series B, including $18MM in October of 2018. The Silicon Valley company is the world's largest processor of on-chain Bitcoin transactions, processing 15% of all global Bitcoin transactions, and $15 billion per month across all cryptocurrencies. BitGo supports over 100 coins and tokens, and has over $2 billion in assets in wallet
- BitPay: Critical in the space to allow businesses and individuals to take Bitcoin and other Crypto as payment. Bitpay has processed almost $3B in transactions since 2011 and raised $10MM in April of 2018, bringing their total funding raised to over $75MM.
- BoostVC: BoostVC has both raised capital as an accelerator focusing on crypto and blockchain related projects and has also invested in over 250 companies. Run by Adam Draper (Tim Draper's son), the accelerator has raised 2 funds close to $50MM and continues to reinvest that money directly into the crypto ecosystem.
- Circle: Circle made noise in the spring of 2018, announcing a whopping $110M raise led by Bitmain, raising the total amount invested in the company to over $250M. No doubt some of that investment was used to help off set the acquisition cost of Poloniex, purchased by Circle for over $400M in early 2018.
- Good Money: Just announced closing $30M led by Michael Novogratz's Galaxy Digital in December of 2018, Good Money The startup aims to act as a bank through which every customer owns some amount of equity, with incentives baked in for those who install the app, refer friends and set up direct deposits.
- Lolli: In November Lolli closed $2.25 Million from an impressive array of investors including Bain Capital Ventures. Lolli allows users to accumulate Bitcoin rewards when they shop at partners of the company. The firm already has over 500 partners like Hilton, Marriot, Walmart and Forever 21 and recently made headlines in December when Sephora signed on as a partner with the startup.
- BlockFi: The NYC based startup that offers U.S. dollar loans against crypto collateral just announced a $4 million in its latest round this year, which includes investments from Novogratz and Morgan Creek Digital's Anthony Pompliano. This was a small raised compared to the previous round BlockFi praised of $52.5 million back in July that was led by Galaxy Digital.
When crypto critics and nocoiners all want to call crypto dead to grab headlines and clicks, this can serve as a strong reminder that smart money is pumping billions of dollars into the ecosystem, making a huge bet on the future of crypto.