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Blockchain Startups Receive More Funding From ICOs Than VCs Thus Far In 2018


Blockchain startups and related businesses have received more funding from initial coin offerings, or ICOs, than from traditional venture capital rounds, in 2017 and the first two months of 2018, technology news website TechCrunch reported, citing data from its sister, Crunchbase, an industry data website.

Based on data from 527 venture capital rounds and ICOs in 2017-2018 year-to-date for companies in Bitcoin, Ethereium, blockchain, cryptocurrency and virtual currency categories, Crunchbase said ICOs were only 32 percent of the total deals, but they raised 78 percent of the dollar volume.

That said, the funding from venture capital firms, including convertible notes, seed and angel rounds, Series A and so on, is set to surpass the record highs set in 2017. More than $900 million was recorded in venture funding in 2017 and over $375 million has been raised thus far this year.

The sizable venture rounds in 2017 were Coinbase's $108.1 million Series D, $43.45 million received by Chinese ASIC chip manufacturer Canaan Creative, and a $42.5 million Series B raised by multisignature bitcoin wallet provider BitGo, Crunchbase said in a separate report.

In 2018, the big deals were $75 million Series B closed by secure hardware wallet-maker Ledger, $18 million invested in the seed round of Russian blockchain-for-cargo-tracking platform QUASA, and $10 million invested in SF-based Harbor Platform.

And venture firms such as Digital Currency Group, Blockchain Capital, Node Capital, Medici Ventures, Digital Finance Group, and Polychain Capital, have all bet big on blockchain technology, the Crunchbase report said.

While the US, followed by the UK, continued to attract most blockchain firms during the 14 months, Singapore and Switzerland were also increasingly seen as favorable locations.

Some of the biggest ICOs in 2017 were Filecoin's ICO that raised $257 million, Tezos token sale which raked in $232 million and Bancor ICO that raised $152.3 million.

This year, the Telegram ICO's target size may be as large as $2 billion, TechCrunch said, citing two unidentified sources.

TechCrunch noted that Crunchbase's data on VC deals were more robust than its data on ICOs due to reporting delays and a certain inherent opacity in the latter.

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