Digital Currency Group took the top spot as the most active bitcoin and blockchain investor, followed by Blockchain Capital.

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While bitcoin has continued to gain recognition as a store of value—with 2016 seeing upticks in bitcoin demand, especially amidst political unrest—many investors and industry leaders have also made investments aimed at developing bitcoin’s underlying technology, blockchain. At the most basic level, blockchains are cryptographically-secured, distributed public ledgers.

Using CB Insights data, we looked at companies and investors tapping bitcoin and blockchain technology to solve longstanding problems. Funding to the sector has gone from almost no investment in 2012 to over $500M in each of the past two years. However, deals fell off significantly in 2016.

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This report contains detailed information on:

Annual deals and dollars

  • In 2016, investors made 132 investments in bitcoin and blockchain companies, fewer deals than in 2014, and an 18% drop from 2015′s high of 161 investments.
  • While cash has continued to pour into bitcoin and blockchain companies post-2012, total funding rose just 5%, from $524M in 2015 to $550M in 2016. For perspective, 2012 saw 5 deals total $1.3M in disclosed investment, and was followed by two years of steep annual increases, to 143 deals and $357M invested in 2014.
  • In total, investors deployed approximately $1.53B to the sector over the past four years.

There were four $50M+ rounds in 2016: Circle ($60M, Series D), Digital Asset Holdings ($60M, Series A), Ripple ($55M, Series B), and Blockstream ($55M, Series A). But 21 and Coinbase still lead in terms of largest financings, having closed $111M and $75M rounds, respectively, in Q1’15.

2017.01.30 Blockchain Annual Dollars_v2

Quarterly financing history

Q1’16 saw the highest total funding of any quarter in 2016, with 45 deals totaling $175M. However, the quarter was followed by steady declines, and Q4’16 finished the year with just 29 deals totaling $87M. 2015 saw a similar downward trend in funding totals, albeit one that started higher and ended lower. In Q1’15, the sector raised $226M in disclosed fundng. That was down to $45M in Q4’15.

Q1’16 highs were buoyed largely by the aforementioned Digital Asset Holdings and Blockstream deals, in addition to $7M funding rounds for Gem, Symbiont, and Simplex. Q4’16 was the tenth straight quarter with more than 28 deals closed.

2017.01.30 Blockchain Quarterly Dollars_v2

Financing trends by stage

Since 2012, deal share has shifted steadily toward later-stage investments as companies in the space have matured. Still, the vast majority of all deals over the past four years have closed at seed or angel stages, which isn’t surprising given the sector’s youth. It should also be noted that the number of deals has increased sharply since 2012, when, as mentioned, there were only 5 deals.

2015 saw Series A, B, and C all represented for the first time. While Series C deals only accounted for 2.5% of deal distribution in 2015, these deals represented 45% of 2015 total funding dollars.

In 2016, Series A deals grew by 14 percentage points, to 22.7%. In addition, Circle received the sector’s first Series D financing. “Other” deals, which include corporate minority, unattributed, and undisclosed investments, have averaged approximately 12% of deal share since 2013.

2017.01.30 Blockchain Global Deal Share_v2

The most active VC investors

Barry Silbert’s Digital Currency Group took the top spot as the most active bitcoin and blockchain investor with 64 investments, followed by Blockchain Capital, with 29 investments. Most of Digital Currency Group’s investments closed at seed and Series A stages, although the firm participated in Series B and C financings for Circle.

Bitcoin & Blockchain Most Active Angel/ VC Investors
2012 – 2017 (YTD 1/30/17)
Rank Investor
1 Digital Currency Group
2 Blockchain Capital
3 Tim Draper
4 Pantera Capital
5 RRE Ventures
5 Y Combinator
7 500 Startups
8 Draper Associates
9 Fenbushi Capital
10 Andreessen Horowitz

 

The most well-funded companies

The ten most well-funded startups have all raised at least $30M, which, again, is a reminder of the sector’s adolescence.

The top three startups are bitcoin-focused: 21 develops hardware for the exploration of new use-cases for bitcoin, Coinbase is a platform to buy, sell, and store digital currencies (primarily bitcoin), and Circle is a payments platform that uses bitcoin to settle transactions behind the scenes (although recent news suggests that Circle may be pivoting away from the cryptocurrency).

Most Well-Funded Global Bitcoin & Blockchain Startups
2012 – 2017 YTD (1/30/2017)
Rank Company Total Funding ($M)
1 Circle Internet Financial  $            136
2 Coinbase  $            117
3 21 Inc  $            116
4 Ripple  $             94
5 BitFury Group  $             90
6 Blockstream  $             76
7 Digital Asset Holdings  $             67
8 Chain  $             44
9 Xapo  $             40
10 bitFlyer  $             34 

 

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