What does

investment
in blockchain
look like?
2013 — 2019
Author: Joel John
Head of Research: Lawrence-Lundy-Bryan
$23.7 Billion raised by 3738
Blockchain Companies
Since 2013

Early Stage Fundraising

High in Count, but follow
on rounds Few and Scarce

75% of All Deal Flow Focused

Only On Early Stage Rounds
 AI and FinTech emerge
as key focus areas

B2B 7.8%

AI
33.8%

Fin Tech
14.7%
Apps 10.7%

Analytics 10.9%

Note : Sample size of 737 companies without focus on Bitcoin, Cryptocurrencies

Source: Crunchbase
 2019 will see 9X more
blockchain deals than 2013

91 255 269 804 871 1,515 398

2013 2014 2015 2016 2017 2018 2019

H1

Note : Deals include ICOs, Debt, PE and Grants

Source: Crunchbase
 Early stage financing
is a competitive business
The high frequency of early stage financing could indicate seed
stage rounds closing quicker. This in turn could lead to a lack of much
needed value added services investors could bring on board.

$500,000,000.00

$250,000,000.00

2013 2014 2015 2016 2017 2018 2019

Jan Jan Jan Jan Jan Jan Jan

Source: Crunchbase
 Easy Capital Does Not
Warrant Ecosystem Success
2018 witnessed roughly 130 times the funding 2013
had but in terms of a user-base, the ecosystem
has not produced a similar growth pattern.

Total raise per year

in US$ millions

108 557 816 329 4217 13,694 3718

2013 2014 2015 2016 2017 2018 2019

H1

Note : Deals include ICOs, Debt, PE and Grants

Source: Crunchbase
 Early stage financing in the
form of seed, angel and pre-seed
backing constitute of 75% of all deals
in the ecosystem today...

Angel
9.6%

Pre-Seed
9.0%
SEED
55%

Series A
12.8%

Note : Sample size of 737 companies without focus on Bitcoin, Cryptocurrencies

Source: Crunchbase
 ...and seed stage raises
are quite healthy in size
The average seed stage firm building for
blockchains raises $1.18 million.

Average raise $205

per round

$118

$43
$38

$15 $11
$1.30 $0.50 $1.18
$0.30
d

A
l

nt

ed

ed

E
ge

un

s
s
ra

s
Se

Se

rie
rie
rie

rie

rie
An

Ro
G

e-

Se
Se
Se

Se

Se
e
Pr

at
or
rp
Co

Source : Crunchbase
 Series A is the ultimate
chasm to cross
Series A constitutes of only 12.8% of all funding rounds

Total funding $2741

raised per stage

$2149

$1153

$591
$479
$410
$265
$208
$68 $97
$39 $49
d

A
nt

ed

ng

ed

E
ge

un
ot

s
s
ra

s
Se

Se
di

rie
rie
rie

rie

rie
An
N

Ro
G

un
e-

Se
Se
le

Se

Se

Se
e
Pr

df
tib

at
ow

or
er

rp
nv

Cr

Co
Co

ty
ui
Eq

Source : Crunchbase
 Deal frequency is still dependent
on Bitcoin pricing
Token returns determine investor appetite
for backing blockchain companies.

250

200
Number of deals done

150

100

50

$2500 $5000 $7500 $10000 $12500

Price of Bitcoin

Source : Crunchbase, Investing.com

 What’s going on?

Too much capital at early stages

Firms that raise seed capital raise an
average of $1.18 million, a figure that
is in sync with web 2.0 peers.

Chasing companies that are

ill-prepared for follow on rounds
The mortality rate of blockchain companies
are high due to challenges stemming from
regulations, a lack of traction and access to
investors that fund firms post series B
 What’s going on?

With misaligned incentives

The after effects of the ICO mania
is becoming increasingly evident as startups
struggle to optimally allocate capital raised or
fine-tune themselves for growth.

Lack of market expertise

The high number of rounds at early
stages mean institutional investors stick
to investing increasingly on later stage firms
with proven traction and product market fit.
This leaves teams with the potential to
be unicorns at the mercy of a handful
of early stage financiers who bring nothing
more than a cheque to the table.
 Where you are
headquartered matters
The United States has more funded blockchain
companies than the next 3 countries combined together.

Top 10 Countries

420

78
68
46
34 26 25 23 19 18
e
es

da

nd

ng

n
or

an
in

di

ai
do
at

na

Ko
la
ap
Ch

Sp
In
m
St

er
ng

Ca
ng

er

ng
itz
d

Ki

G
ite

Si

Ho
Sw
d
Un

ite
Un

Note : Data specific to early stage financing for blockchain

companies between 2017 and 2019.
 But cities are beginning
to change the trend
Sandboxes set up in London and Singapore make them
attractive for startups in Europe and South-East Asia to raise from.

Top 10 Countries

100

78

57 55 55

20 20 18 16
14
g
o

on

rk

ng

es

ou

ai

n
ijin
or

rli
sc

gh
Yo

el
nd

zh
Ko

Be
ap
ci

Be

ng

an
ew

ng
an

Lo

ng
ng

sA

Sh
Fr

Ha
N

Ho
Si

Lo
n
Sa

Note : Data specific to early stage financing for blockchain

companies between 2017 and 2019. Source : Crunchbase
 London emerging
as a hub for seed raises
Roughly $1 billion has been raised by
companies here since 2013

Count of funding type

London

121

30
27 25
21
18 19
10
8 6 3 3
2 2
1 1
sA
O

ed

ce

nt

ty

t
ge

ke
ot
w

in

in
un

un

ee

ui
IC

ra
an
Se
rie

no
rie

ar
An
nd

nc

Eq
G

S
Ro

Ro
ist

yM
e-
Se

e
Se

nk

a
u

in

bl

O
ss

Pr
g

e
df
sU

at

tF
in

ar
-IP
ta
A

ow

or
nd

nd
er
ity

eb
rie

st
Cr

rp

nv

Po
Fu

co
qu
Se

D
Co

Co
ty

Se
-e
e

ui
ur

on

Eq
nt

N
Ve

Note : Data specific to early stage financing for blockchain

companies between 2017 and 2019. Source : Crunchbase
Build a better
internet
Base Camp Open Data Accelerator
Apply before 15th August
outlierventures.io/base-camp