Financing: cryptocurrency wins, not private blockchain

The Blockchain Report 2020 of CB Insights does the accounts and observes profound changes in the funding of crypto startups and blockchain worldwide (-30%). Investors also largely favor players in cryptocurrencies, use which is essential on the blockchain.

In 2018, the money invested by the capital risk in the sector of blockchain had peaked, leaping in one year from 1.2 to 4.26 billion dollars. Last year, this funding went seriously stalled, notes CB Insights in its study Blockchain Report 2020.

The funds raised from VCs amount to $ 2.79 billion. The number of fundraisers also fell (-2%), from 822 to 807. However, it was mainly the amount of these investments that collapsed (-30%).

$ 434 million for the private blockchain

On the side of the investors themselves, the hedge funds of the crypto universe remain the most active in this market. Polychain Capital and Galaxy Digital, with respectively 28 and 24 participations, occupy the first places.

Nevertheless, traditional players are gradually developing their investments, while representing only 15% of equity holdings. As for the area deemed most attractive by investors, it is cryptocurrency which keeps the lion's share.

The share of funds raised from VCs and allocated to crypto startups has grown steadily over the years. In 2015, they won more than $ 500 million, compared to $ 86 million for corporate uses of the blockchain.

In 2019, the balance of power still remains unbalanced with only $ 434 million for the blockchain business – more than $ 2.3 billion for other uses of the blockchain, essentially the cryptocurrency.

The balance of investments in B2B applications of the blockchain has yet to be put into perspective. A fundraiser alone weighs half of the funds raised last year: $ 200 million have indeed been harvested by Ripple.

Private blockchain: consortia, but emerging projects

Companies are therefore still struggling to develop their uses of blockchain in their processes. References to these technologies during companies' financial presentations were thus halved between 2018 and 2019, notes CB Insights.

If companies join consortia, as TradeLens, To explore the possible applications of blockchain, the projects remain at an early stage. In the area of private blockchains, two technologies stand out: Hyperledger and R3 Corda.

Faced with the slow progress of blockchain in the professional environment, investors therefore favor crypto bricks, including payments, the infrastructure of mining and protocols. In 2019, Celo raised $ 30 million.

In addition, the crypto ecosystem and services continue to expand in this sector with, for example, the emergence of new products from custody and trading. The fintechs of traditional finance in turn offer crypto products.

The insurance services they too are supporting this development, particularly with exchange clients. One of the results of the ecosystem growth is a total of network assets Challenge that it reached $ 1.2 billion in 2019. This total has been halved since the coronavirus crisis.