Digital Transactions Authoritative, insightful and timely information for payments professionals
By John Stewart
@DTPaymentNews
Bitcoin may be commanding higher prices these days, but the flow of investment cash pouring into Bitcoin and blockchain startups is slowing down. Global funding totaled $550 million last year, up just 5% from 2015, while the number of deals slipped from 161 to 132, according to figures compiled by CBInsights, a New York City-based investment-research firm.
By contrast, investment in the technology grew 47% in 2015, from $357 million in 2014, and the number of deals climbed 13%. This means there were fewer funding deals last year than in 2014, according to CBInsights’ research.
Blockchain is the public distributed-ledger technology that forms the foundation for Bitcoin as well as a number of lesser-known digital currencies. Bitcoin has been trading above $1,000 in recent days as buyers, especially those in China, bid up its price. That’s in contrast to a year ago, when a single Bitcoin fetched less than $400.
While startup funding in 2016 started strong, with $175 million on 45 deals in the first quarter, investment fell off throughout the year. The final quarter saw $67 million in funding on 29 deals. To be sure, a like pattern developed in 2015, with a record $226 million on 32 deals in the first quarter dwindling to $45 million on 40 deals by the fourth quarter.
Still, deal activity remains far more robust than a few years ago for this relatively young technology. Only five deals closed as recently as 2012, and in 2013 activity added up to just 47 deals worth $93 million.
At $136 million, the most well-funded company so far is Circle Internet Financial, whose platform uses blockchain to settle remittances and other transactions. Rounding out the top five are Coinbase ($117 million), 21 Inc. ($116 million), Ripple ($94 million), and BitFury Group ($90 million).
Doing the most deals among investors is Digital Currency Group, with 64 deals, followed by Blockchain Capital, with 29.
