Venture Capital In Cryptocurrencies And Blockchain Technologies


Last year saw the number of Initial Coin Offerings reach dizzying levels. This was mostly attributed to the fact that public interest in cryptocurrencies had grown considerably. During this period cryptocurrency projects primarily turned to ICOs as their default method for kick-starting their revenue streams. For investors ICOs were also highly lucrative and this further enhanced interest in the sector.
Investors weren?t the only beneficiaries though. Per Coinschedule, in 2016 Initial Coin Offerings attracted amounts totaling $95 million but this figure grew to $3.8 billion in 2017. The trend is expected to continue this year and so far $2.9 billion has already been raised. Since the first quarter of the year is not even over the amounts that ICOs will raise in 2018 is highly likely to eclipse what was raised in 2017 if the current pace continues.

Initial Coin Offerings

The growing popularity of Initial Coin Offerings would make it seem like venture capital firms have been out of the picture with regards to virtual currencies. That is not the case however and the truth is that VC firms have been participating in ICOs as long as they have existed. The reason they don?t get a lot of coverage is the fact that they are not such a novelty. Also the nature of ICOs is such that any entity or individual can take part in them just like is the case with IPOs.
However it is also true that some VC firms have been hesitant to put their money in Initial Coin Offerings. This is partly because of the volatility that is associated with virtual currencies. Consequently the approach venture capital firms have taken when investing in the sector is to place their bets on businesses or services which are related to the blockchain technology and virtual currencies. These businesses or services that VC firms are putting their money in include payment solutions, development labs, wallet services and exchanges.

VC deals

Per a study conducted by Crunchbase the number of venture capital deals that have been conducted in the realm of blockchain technology since 2012 is around 1,000. The combined value of these deals is estimated to be more than $2.5 billion with approximately $1 billion having been brokered last year. All indications are that this year venture capital will have a record-breaking year with regards to cryptocurrencies. When Crunchbase was releasing its report about $400 million had been pledged to various projects by firms which translates to 40% of what was brokered last year.
One of the cryptocurrency firms that has received a huge amount of attention this year is Ledger, a hardware wallet manufacturer. In a series B round, Ledger raised from 12 investors approximately $75 million. Draper Espirit, a pan-European fund was one of the largest contributors.
A report compiled by CB Insights reveals that the big players with regards to venture capital that is being directed to cryptocurrencies and blockchain technologies include Overstock, Google and SBI Holdings. Big banks such as JPMorgan Chase, Goldman Sachs and Citi are also on the list.

Dippli is an independent media outlet that covers the current events in the crypto space. Got breaking news or a story to share? Then feel free to contact us at


Please enter your comment!
Please enter your name here