Investment Highlights from CoinDesk’s State of the Blockchain

Blockchain  •  Ethereum

For anyone who hasn’t got around to reading CoinDesk’s third quarter State of the Blockchain report, here are some highlights pertaining to startup investment.

First, venture capital investment in blockchain startups is down 18% year-to-date.  Based on CoinDesk’s data, a total of $114 million was invested by venture capital firms in blockchain startups in the third quarter of this year, with nearly half of that amount being raised by Ripple for their Series B financing.

Second, based on one year of data, CoinDesk can see no discernable trend in whether hybrid, public, and enterprise blockchain solutions are more popular with venture capital firms.  More aggregate dollars were invested in hybrid models in the third quarter.  However, because CoinDesk classified Ripple as a hybrid solution, Ripple’s financing would have heavily skewed the third quarter statistics. While hybrid models had the highest aggregate dollar amount invested, public concepts had a larger number of investments. Interestingly, despite the buzz around ethereum and its possibilities for smart contracts, CoinDesk notes that ethereum startups have yet to attract significant funding.

Third, Silicon Valley is still where the most venture capital money is coming from, with 40% of the aggregate dollars coming from Silicon Valley firms based on CoinBase’s data.

Finally, the report identifies growth in enterprise solutions such as Thompson Reuters’ new identity tool BlockOneID and Microsoft’s continued investment in Blockchain-as-a-Service, or BaaS, along with an increasing number of banks looking to blockchain solutions.  While the report did not include discussion of merger and acquisition activity, interest in blockchain solutions by large enterprises could be favorable for such activity.

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