For this quarter’s funding analysis, let’s examine how average funding in the blockchain technology sector is evolving. The graphic below shows the blockchain technology average funding across all deals over time by quarter.
As the graphic demonstrates, blockchain technology average funding deal size in Q1 2019 was at $19M, which increased by 8% from the $17M in the same quarter last year. The average funding deal size has experienced robust growth, with the average funding last quarter around 7 times larger than it was 5 years ago. The top three funding events in Q1 2019 include a $90M round into Ground X, a $65M round into Figure, and a $50M round into Dorae.
The blockchain technology industry has seen 1,130 investors and $11B total all time funding. Let’s analyze which blockchain technology categories have the most number of investors actively financing the startups. The graphic below highlights blockchain technology categories based on the number of investors in each category.
As the graphic demonstrates, Blockchain Innovations has the highest number of investors at 692, with Digital Asset Exchanges following behind at 237. Blockchain Innovation companies produce blockchain distributed ledger technologies. Digital Asset Exchange companies allow users to buy and sell digital assets, provide market analytics, and allow for the implementation of sophisticated trading strategies. In addition, the average number of investors across all blockchain technology categories is 147.
This blog post examines the different components of the blockchain technology ecosystem. We will illustrate what the categories of innovation are and which categories have the most companies. We will also compare the categories in terms of their funding and maturity.
Blockchain Innovations Is The Largest Blockchain Technology Category
Let’s start off by looking at the Sector Map. We have classified 1,127 blockchain technology startups into 12 categories. They have raised $11B from 1,130 investors. The Sector Map highlights the number of companies in each category. It also shows a random sampling of companies in each category.
We see that Blockchain Innovations is the largest category with 327 companies. These companies are working on distributed ledger technologies, such as smart self-enforcing contracts, cross-blockchain interoperability, and increased transaction speeds. Some example companies in this category include Blockstream, Filecoin, Blockstack, and Ripple.
Let’s now look at our Innovation Quadrant to find out the funding and maturity of these categories in relation to one another.
The Established Quadrant Has the Most Blockchain Technology Categories
Our Innovation Quadrant divides the blockchain technology categories into four different quadrants.
We see that the Established quadrant has the most number of blockchain technology categories at 6, accounting for 50% of all blockchain technology categories. The Trust and Verification category has the highest average age, and the Mining category has the highest average funding. On the other hand, the Business Service category is low on both average funding and age.
As we make our way through Q1 of 2019, let’s look back on 2018 and analyze how exit activity for blockchain technology compares to previous years. The graphic below shows total annual blockchain technology exit events over time.
As the graphic demonstrates, 2018 saw a drop in blockchain technology exit activity compared to the previous year. The 9 exit events in 2018 represent a 25% decrease from the 12 exit events in 2017 and a 47% decrease from the 17 exit events in 2016, which was the highest year on record for exit activity. Some of the exit events in 2018 include Poloniex’s acquisition by Circle for $400M, Earn.com’s acquisition by Coinbase for $120M, and Coincheck’s acquisition by Monex Group for $33.6M.
Let’s look back on 2018 and examine how funding in the blockchain technology sector compares to previous years. The graphic below shows the total annual blockchain technology funding amounts over time.
As the graphic demonstrates, 2018 experienced the highest blockchain technology funding on record at $4.1B. It represents a 28% increase from the previous year’s funding. Over the past 5 years, blockchain technology funding showed staggering growth with a CAGR of 87%.
The blockchain technology industry has seen $10B in total all time funding. Let’s analyze the investors making bets into blockchain technology and identify the most active firms.
The graphic below shows blockchain technology investors based on their number of investments into the sector. If an investor participates in two investment rounds in the same company (such as a Series A and Series B), that would qualify as two investments for this graphic.
As the graphic demonstrates, the Digital Currency Group has made the most bets in the blockchain technology sector with 110 investments. BlockChain Capital follows in second place with 58 investments. Examples of companies that Digital Currency Group invested in include Basis, Circle, Ledger, and BitGo. Let’s see which investors make their way onto this list in 2019!