With deals and funding to bitcoin and blockchain startups down in 2016, it’s clear investors are being far more selective in placing bets in the sector.
We define bitcoin and blockchain broadly to include cryptocurrency-focused companies involved in the trading, storing, or usage of cryptocurrencies — primarily bitcoin — and companies developing industry-specific applications of blockchain technology. At the most basic level, blockchains are cryptographically secured, distributed ledgers, first developed as the underlying infrastructure of bitcoin. For more information on our classifications and definitions, see our bitcoin and blockchain market map.
We identified 10 early-stage startups (Convertible Debt, Seed/Angel, or Series A) to watch based on recency of funding, quality of investors, and Mosaic, our predictive algorithm that tracks private company health. The companies on our list have all raised funding in the past 20 months.
1. Storj Labs
Storj is building a decentralized cloud storage network to improve security and lower costs of storing information in the cloud. Unlike traditional centralized cloud storage services – say, Dropbox, Amazon, or Google – Storj uses blockchain technology to provide secured peer-to-peer “communal” storage, which also allows users to rent extra storage space.
Select Investors: Google Ventures, Qualcomm Ventures, Techstars Ventures
Total Disclosed Funding: $5.05M
2. Cambridge Blockchain
Cambridge Blockchain is developing a blockchain-based identity platform for financial institutions in order to streamline compliance, namely KYC (“know your customer”) regulations. The firm is working to roll out services for European customers, given the upcoming implementation of the European General Data Protection Regulation, in May of 2018.
Select Investors: Digital Currency Group, Partech Ventures, Santander InnoVentures
Total Disclosed Funding: $2M (Convertible Debt)
BitPesa is a Kenyan-based merchant-focused platform that helps businesses and consumers transfer money across borders and continents via bitcoin. The company seeks to capitalize on bitcoin’s distributed nature and (relatively) low transaction fees in order to give “unbanked” individuals access to the modern global economy. BitPesa began as a remittance service for Kenyan citizens living abroad, but has pivoted its focus to merchants.
Select Investors: Blockchain Capital, FuturePerfect Ventures, Draper Associates, Pantera Capital
Total Disclosed Funding: $5M
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Funderbeam has created a blockchain-based “stock exchange” for the funding of early-stage and growth-stage companies and the subsequent trading of equity. Funderbeam’s secondary market uses blockchain technology to offer smart contracts to shareholders and allows for cross-border transactions on the exchange.
Select Investors: 3TS Capital Partners, Draper Associates, IQ Capital Partners
Total Disclosed Funding: $5.07M
Hijro is building a blockchain-enabled global trade finance platform, whereby parties can streamline supply chain operations and optimize working capital. The platform includes a marketplace — the Hijro Trade Asset Marketplace — where financial institutions and businesses can transact.
Select Investors: 500 Startups, Draper Associates, Digital Currency Group, Fenbushi Capital, Thomson Reuters
Total Disclosed Funding: $2.78M
Bitso is a Mexican bitcoin exchange. Cryptocurrency trading in Latin and South America continues to grow, as unbanked individuals seek to gain access to credit markets and global economies via cryptocurrencies. A large share of the population in Mexico is currently unbanked.
Select Investors: Monex Group, Variv Capital, Xochi Ventures
Total Disclosed Funding: $2.66M
OpenBazaar is a bitcoin peer-to-peer marketplace that does not charge “middleman” transaction fees. Instead, the platform makes money by arbitrating disputes and serving as an escrow agent (of sorts) to guarantee the sale and shipment of an item to both buyer and seller.
Select Investors: Andreessen Horowitz, Union Square Ventures
Total Disclosed Funding: $4.01M
8. Blockstack Labs
Blockstack Labs is building a blockchain-enabled web browser, where users control their data and decentralized apps run independently on users’ devices. By eliminating the traditional model of centralized servers and cloud services, the company hopes to remove middlemen and central network attacks, effectively changing the nature of internet privacy.
Select Investors: Naval Ravikant, Digital Currency Group, Union Square Ventures
Total Disclosed Funding: $6.79M
Chronicled is an ethereum-based IoT platform that enables physical property to be linked to ethereum for origin, supply chain, and authentication purposes, among other use cases. Ethereum is another cryptocurrency platform. Using ethereum, the company plans to implement smart contracts that will allow real-world, physical events to be registered on the blockchain. One example could be the transferring of a physical deed or title, whereby a triggered smart contract will transfer ownership on the blockchain. The company was featured at the recently launched Enterprise Ethereum Alliance consortium.
Select Investors: Colbeck Capital Management, Mandra Capital, Pantera Capital
Total Disclosed Funding: $4.83M
10. Hashed Health
Hashed Health is a Nashville-based blockchain health consortium that is looking to use blockchain technology for various healthcare use-cases. Specifically, the company has pointed to revenue cycle management, EMR (electronic medical records), insurance, and pharmaceutical supply chain logistics as areas that could be made more efficient with blockchain technology.
Select Investors: Fenbushi Capital, Martin Ventures
Total Disclosed Funding: $1.85M
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