Venture Capital Investment in Blockchain and Crypto up 280% in 2018, Report Shows


"Traditional" venture capital (VC) investments in blockchain and crypto-businesses have almost tripled in the first three quarters of 2018, according to a new Diar report published on September 30th.

Diar cites Pitchbook data indicating that blockchains and encrypted companies have raised nearly $ 3.9 billion in VC capital so far this year – a 280% increase over last year. The increase is not only in terms of a growing number of agreements, but also in the growing median value of each, which has risen by over $ 1 million this year.

Investments and VC agreements are counted in blockchains and companies linked to cryptocurrencies, 2013-18

Investments and VC agreements are counted in blockchains and companies linked to cryptocurrencies, 2013-18. Source: Diar

Median blockchain investment VC, 2013-18

Median blockchain investment VC, 2013-18. Source: Diar

The combined total of the ten largest transactions in 2018 was $ 1.3 billion, of which nine are representative of traditional equity investments, rather than purchases of encrypted token utilities. The anomalous value was the DFINITY token, which raised a total of $ 163 million from VC investors Andreessen Horowitz, Hashed and Polychain Capital.

Pitchbook data revealed that Barry Silbert's Digital Currency Group (DCG) was "by far" the most prolific investor in the VC sector, closing over 110 agreements in the cryptographic space and blockchain over the past year. DCG has bypassed both Blockchain Capital and Pantera Capital, whose combined offers have reached the value of 100.

Other strong investors included VC companies Andreessen Horowitz, Danhua Capital and Future Perfect Ventures, along with "active angels" Tim Draper, Naval Ravikant, Roger Ver and Barry Silbert.

In addition to these important actors, Diar reports that almost 2,000 investors have closed agreements with at least one blockchain company this year – the fifty most active of these have invested in "at least" eight. In terms of investor profiles, 52% of investors did not focus exclusively on the cryptic and blockchain sector, but signed their bids as part of a more diversified portfolio.

Finally, Diar also analyzed the geographic distribution of capital VC which results in blockchain, with US investors representing the lion's share of 79%, followed by 12% by China and 2% by South Korea and Singapore respectively.

The new Diar report also includes a section on the phenomenon of new banking operations aimed at facilitating the blockchain industry, whether exclusive blockchain banks construct "from scratch", banks that integrate fiat and crypto services, or growing number of cryptocurrencies related companies that are protecting bank licenses.

As reported earlier today, Korea Investment Partners (KIP), South Korea's largest Korean company, has invested in its first blockchain startup, specializing in management of supply chain management technology. KIP is known for its investments in high-end companies that include Naver – Korea's largest search engine, as well as owner of the popular Japanese messaging line – and the Korean messenger giant Kakao, among others.

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