Blockchain Startups’ Investment Activity Slips in 2019

Blockchain Startups’ Investment Activity Slips in 2019

Following a decrease in total funding dollars, Investment activities in the fourth quarter of 2019 point to pockets of potential for blockchain technology in enterprise applications, data by CBInsights showed.

In 2019, total equity funding, one indicator of investor excitement, dropped by more than 30 percent. Mentions of the system in transcripts of public sector earnings also fall off.

One reason behind this slip is that many products are still trying to find product market fit.

Entrepreneurs have proposed blockchain technology applications ranging from supply chain tracking to financial asset settlement, but the only one that has found acceptance at any significant scale so far is the development and trading of crypto-currency.

In that area, Bitcoin still dominates, representing over 65 percent of the total value of the cryptocurrency market.

Investor activity shows pockets of potential are worth tracking in the blockchain sector.

According to data from CB Insights, investment trends from Q4 2019 across the space showed that dollar funding in 2019 was down 28% from 2018’s peak of $4.3B, while deal activity remained relatively flat.

Ripple Leads Blockchain Startups’ Investment Activity in 2019

Ripple, an enterprise payment network, raised the largest amount of funding in the quarter— a $200 million Series C round from SBI Group, Tetragon Financial Group, and Route 66 Ventures, which valued the company at $10 billion.

Ripple claimed that the funding would go towards increased recruiting, adding offices overseas and increasing flexibility in the balance sheet.

With disregard to Ripple, businesses looking to streamline business processes and build infrastructure were showing strongly in Q4. Figure Technologies has raised $103 million for its Provenance home equity lending platform.

Digital Asset raised $35 million to support their Digital Asset Modeling Language (DAML), used to develop “faster settlements of financial assets.” Layer1 raised $50 million in Q4 towards building a new Bitcoin mining facility that runs on wind and solar power in Western Texas.

Bankers in China Believe Blockchain Tech Necessary for Economy

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