Venture Capital Firms Rush into Blockchain, Investing Way More Than in 2017: Diar Study

Venture capital investors go for Blockchain startups without ICOs

Wed, 3/10/2018 - 20:44

Venture Capital Firms Rush into Blockchain, Investing Way More Than in 2017: Diar Study

Cover image via U.Today

Now that ICOs are becoming less popular, according to some experts, venture capitalists keep investing in Blockchain-oriented companies — funding them directly, a new Diar report claims.

Boost of ‘business angels’ investment

A recent report by Diar says that almost $4 bln of VC investment came to Blockchain startups during Q1-Q3 of 2018. Apparently, this is almost three times more than in the past year.

The number of funds that 10 biggest startups received from venture capitalists reportedly amounted to nearly $1.5 bln.

This all was done by means of a traditional investment scheme that ICO tried to replace. However, the report says that the DFINITY startup even managed to raise $163 mln from large-scale business angels by selling its tokens.

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Apparently, the spike in traditional investment can be explained by the fact that tokens issued by a great number of companies plummeted after being emitted by almost 90 percent.

ICOs are going down

Another reason of ICO tokens losing popularity, according to the report, is that startups that initiate them have been going through regulatory turbulence. The research has it that ICO projects are being checked rigorously, along with their leaders, and since they are not obliged by any contracts to launch their products, the number of actual launches is low as well as the degree of these projects’ adoption.

Investments received via ICOs and the ratings of those projects have dropped to the yearly bottom, the report claims.

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Among the top 10 startups that succeeded with traditional VC investments are the giants Bitmain, R3, Ledger and few others.

Banks for crypto trading

Diar’s study also mentions so-called crypto banks that allow their clients to buy and sell fiat currencies for virtual coins. These include a recently launched Swiss Seba Crypto AG and the Maltese Founders Bank that Binance has bought a stake in. Litecoin has also bought a stake of 20 percent in a German WEG Bank earlier this year.

Diar says that there are just four banks like that in the US and three in Europe that perform operations with crypto.

About the author

Yuri Molchan

Yuri is interested in technology and technical innovations. He has been writing about DLT and crypto since 2017. Believes that blockchain and cryptocurrencies have a potential to transform the world in the future in many of its aspects. He has written for multiple crypto media outlets. His articles have been quoted by such crypto influencers as Tyler Winklevoss, John McAfee, CZ Binance, Max Keiser, etc.