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Blockchain Investment Trends Review | Blog 1

Serena Wu, Nakamoto & Turing Labs


This blog series intends to discuss the trends of investments and deal funding in the blockchain sector, provide updates on some key blockchain developments in China and the enterprise blockchain domain, and provide insights into future outlook on overall blockchain investment and spending in the next few years.

The blog series will include the following sections:

  • Key stats at a glance (Blog 1)

  • Overview of investment trends and recent deals (Blog 1)

  • Updates in China: deal market, policies, and trends (Blog 2)

  • Updates in enterprise blockchain (Blog 3)

  • Future outlook (Blog 3)


Summary

  • Investments in blockchain reduced from the peak of 2018, but still reached $2.8bn in 2019

  • Investments were still rather focused on the cryptocurrency arena: majority of the investments were non-enterprise blockchain funding

  • U.S. and China are the two most actively invested countries. In 2019, the two countries represented 47% and 22% of total funding globally


Key stats at a glance

  • VC-backed deals and financing reached $2.8bn in 2019

  • Global deal shares in 2019: 47% US, 22% China

  • Deal stage in 2019: 65% Seed/Angel, 23% Series A

  • Blockchain spending (corporate spending on blockchain initiatives) in 2019: $2.7bn

  • Forecasted blockchain spending in 2023: $14bn

  • Forecasted CAGR in 2019–2023: 60%

(Source: CBInsights, IDC)


Overview of investment: deal float and deal value

Overall, investments in blockchain are still active in terms of deal count, but the total invested amount dropped in 2019. According to CBInsights, While the annual deal count of VC-backed deals and financing in blockchain remained largely stable (~800 deals), annual deal flows dropped from $4.3 billion in 2018 to $2.8 billion in 2019.


Investments in blockchain are still rather focused on the cryptocurrency arena: the majority of the investments were non-enterprise blockchain funding, according to CBInsights.



Top five most active investors

VC and Corporate VCs are the major types of investors, according to CBInsights.


The top five most active investors in blockchain in 2019 were NGC, Coinbase Ventures, Galaxy Digital, Fenbushi Capital, and Digital Currency Group. Three of these companies are based in the U.S., and the remaining two in Asia.


Investment stages

The majority of the blockchain deals were early-stage (seed/angel and Series A), which has been stable for the past years, according to CBInsights. In 2019, 88% of the deals were seed/angel and Series A.


Geographic distribution

U.S. and China are the two most actively invested countries. According to CBInsights, the top countries with deal activities in 2019 were U.S., China, Switzerland, and the UK. China was in the second place with an increasing share: (4% in 2016, 10% in 2017, 27% in 2018, 22% in 2019).


In addition, China has been very active in terms of deal count. According to 01 Caijing, In the first 10 months of 2019, monthly deal count in China sometimes even exceeded that of the U.S. However, the U.S. was consistently leading in terms of deal value.


High profile deals in 2018–2019

The following table shows a list of high profile blockchain deals in 2018 and 2019 in the U.S. and China, including some of the current blockchain big names such as Ripple and Coinbase.


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