Blockchain In Review Investment Trends And Opportunities

https://www.youtube.com/watch?time_continue=470&v=vDOjvWYQFCw
Early investments in the sector explored bitcoin’s outlined purpose Wallets, exchanges, and remittance platforms allow consumers to send bitcoin across borders and watch their transactions settle on the blockchain in real time.
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https://www.youtube.com/watch?time_continue=470&v=vDOjvWYQFCw
About Techcelerate Ventures

Tech Investment and Growth Advisory for Series A in the UK, operating in £150k to £5m investment market, working with #SaaS #FinTech #HealthTech #MarketPlaces and #PropTech companies.
Blockchain BlockchainCBI Equity ICO funds Equity deal
<p>#BlockchainCBI
Blockchain In Review
Investment Trends And Opportunities
#BlockchainCBI
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Blockchain Report & Article
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Click here for the article
Click here for the report
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What is Blockchain?
Blockchain Venture & Equity Investment
The Rise of Initial Coin Offerings
Blockchain Corporate Investment
Key Takeaways and the Road Ahead
Q&A
Table of Contents
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Source: Dilbert.
What is Blockchain?
A Three-Minute Primer
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Blockchain Venture & Equity Investment
A Shifting Landscape
12
#BlockchainCBI
Since 2012
650+ equity deals
have closed for over
$2B
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#BlockchainCBI
Early investments in the 
sector explored bitcoin's 
outlined purpose
Wallets, exchanges, and 
remittance platforms 
allow consumers to send 
bitcoin across borders 
and watch their 
transactions settle on the 
blockchain in real time.
Early investments focused on currency and trading
WALLETS & MONEY SERVICES
EXCHANGES & TRADING
Equity funding (excluding ICOs)
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#BlockchainCBI
Howard Marks
Founder, Oaktree Capital Management
"Think about the fact that the price of Bitcoin has risen 
more than 350% so far this year and 3,900% in the last 
three years. To the degree people argue that Bitcoin is 
a currency, then (a) why is it so volatile? and (b) is 
that desirable? You might want to consider whether a 
real currency can do that, or whether speculative 
buying is determining Bitcoin's price."
Use case as currency gives investors pause
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Startups pivoted as 
certain use cases see 
little traction
Coinbase initially 
promised "instant 
payments, simple 
transfers, and 
widespread adoption."
The company's branding 
has since shifted to 
emphasize its exchange 
and trading platforms, 
primarily for investment.
Coinbase homepage shifts from currency to investment
2013  2017 YTD
January 2013
January 2017
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#BlockchainCBI
Early blockchain startups 
failed at a higher rate 
than other sectors
Of 103 blockchain 
companies that received 
seed or angel funding in 
2013  2014, only 28% 
managed to raise 
additional funding, and 
just one company made 
it to Series D.
Blockchain vs. tech rate of follow-on equity funding
Equity funding
100% 
28% 
11% 
2% 
100% 
46% 
28% 
14% 
Seed/Angel
1st Follow
2nd Follow
3rd Follow
2013 - 2014 Blockchain Cohort
2008 - 2010 Tech Cohort
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BIG BANKS CONSIDER USING BITCOIN 
BLOCKCHAIN TECHNOLOGY
September 17, 2015
FOR THE CURIOUS BUT UNCOMMITTED, 
A BLOCKCHAIN IN A BOX
December 8, 2015
2015: Bitcoin bad, blockchain good
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As the sector matured, 
VCs turned to private 
business blockchains
Expanding beyond 
bitcoin, private 
blockchain providers 
looked to build enterprise 
blockchain and 
distributed ledger 
solutions, first for 
financial services, and 
then moving to other 
verticals.
Sector matures, focus moves to private blockchains
ENTERPRISE & GENERAL 
BLOCKCHAIN SOLUTIONS
CAPITAL MARKETS & 
FINANCIAL SERVICES
Equity funding (excluding ICOs)
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#BlockchainCBI
Brand-name investors 
have placed far-ranging 
bets on blockchain
Investors have since 
placed blockchain bets 
across payments, ICOs, 
and alternative use cases, 
such as digital rights 
management 
(MediaChain) and 
commerce (OpenBazaar).
Select brand-name investors and blockchain investments
Equity funding (excluding ICOs) 2012  2017 YTD (10/08/2017)
Note: LP placements into cryptocurrency hedge funds (e.g. MetaStable) are not considered equity funding.
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2017 should see highest 
number of equity deals
After a weak 2016, 
investors are returning to 
the sector en masse,
driven in large part by a 
run-up in cryptocurrency 
prices and a substantial 
increase in the number of 
companies looking to 
raise funding.
Blockchain VC-backed deals vs. equity deals
Equity deals (excluding ICOs) 2012  2017 YTD (10/08/2017)
2
20
54
61
57
59
6
50
143
165
138
144
77
(Full-year run rate)
188
(Full-year run rate)
2012
2013
2014
2015
2016
2017 YTD
Blockchain VC-Backed Deals
Blockchain Equity Deals
Note: VC-backed deals include participation from at least one VC-type investor (VC, Growth Equity, or Super Angel).
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After mega-deals, 
dollars should also rise 
in FY 2017
While some have 
pronounced the death of 
traditional blockchain VC 
due to ICOs, equity deals 
and dollars should rise 
this year.
Total funding has been 
boosted in large part by 
mega-deals to Coinbase, 
R3, and Digital Asset 
among others.
Blockchain annual global financing history
Equity funding (excluding ICOs) 2012  2017 YTD (10/08/2017)
$98 
$357 
$525 
$545 
$640 
6
50
143
165
138
144
2012
2013
2014
2015
2016
2017 YTD
Disclosed Funding ($M)
Deals
$831
(Full-year run rate)
188 
(Full-year run rate)
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Blockchain-specific 
firms are the sector's 
most active VCs
While the sector has 
matured, the top 
investors (by number of 
portfolio blockchain 
companies) remain 
blockchain-focused VC 
firms, like Digital 
Currency Group, 
Blockchain Capital, and 
Pantera.
Most active VC blockchain investors
2012  2017 YTD (10/08/2017)
Rank
Venture Investor
1
Digital Currency Group
2
Blockchain Capital
3
Pantera Capital
4
Draper Associates
5
500 Startups
5
RRE Ventures
5
Fenbushi Capital
8
Andreessen Horowitz
8
Plug and Play Ventures
10
Liberty City Ventures
10
Union Square Ventures
10
FuturePerfect Ventures
Note: VCs in orange focus specifically on blockchain.
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The sector is maturing, 
with more deals at 
later stages
A steady decline of the 
proportion of early-stage 
equity deals may indicate 
that blockchain  like 
other emerging 
technologies  is 
moving from creation, to 
crowding, to 
consolidation.
Blockchain annual global deal share by stage
Equity deals (excluding ICOs) 2012  2017 YTD (10/08/2017)
100% 
70% 
71% 
72% 
57% 
50% 
14% 
17% 
8% 
21% 
20% 
2% 
2% 
4% 
7% 
5% 
2% 
1% 
1% 
1% 
1% 1% 
14% 
10% 
13% 
14% 
21% 
2012
2013
2014
2015
2016
2017 (YTD) 
Seed / Angel
Series A
Series B
Series C
Series D
Series E+
Other
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Deal share grows 
outside of top countries
As the sector has 
matured, teams looking 
for equity funding have 
outgrown the top ten 
countries, highlighting 
the technology's inherent 
bend toward borderless 
development.
Blockchain annual deal share by country
Equity deals (excluding ICOs) 2013  2017 YTD (10/08/2017)
0% 
10% 
20% 
30% 
40% 
50% 
60% 
70% 
80% 
2013
2014
2015
2016
2017 YTD
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Blockchain Venture & Equity Investment
Conversation and Q&A
@cbinsights
#BlockchainCBI
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#BlockchainCBI
The Rise of Initial Coin Offerings
Ethereum and Tokens
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THE NEW BLOCKCHAIN TREND THAT 
COULD TRANSFORM BUSINESS
October 18, 2017
HOW BLOCKCHAIN AND ICOS ARE CHANGING 
THE FUNDING GAME FOR STARTUPS
September 24, 2017
2017: Forget blockchain  let's talk crypto
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#BlockchainCBI
Initial coin offerings
Blockchain 
startup seeks 
cash, 
announces an 
ICO
ICOs embed 
value in the 
protocol, and 
reward:
(1) investors 
(2) developers 
(3) users
The startup 
exchanges 
"utility tokens" 
for cash
Tokens are 
traded on 
exchanges
1
Investment 
of money
2
In a common 
enterprise
3
With an 
expectation 
of profits
4
From the 
efforts of 
others
Is your token a security?
The Howey Test
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#BlockchainCBI
Since January 2016
250+ ICOs
have closed for well over
$2B
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#BlockchainCBI
Fred Wilson, October 2017
Partner, Union Square Ventures
"We have a good thing going with the equity 
based model but we understand that we have 
to adapt and react to changes in the market 
and we are doing that, fairly aggressively, with 
tokens."
The disruption of VC?
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#BlockchainCBI
ICOs growing at a much 
faster rate than 
equity deals
Over 250 blockchain 
teams have completed 
ICOs since January 2016, 
with more than 55% of 
them raising during or 
after July 2017.
Cumulatively (since 
January 2016), the 
number of ICOs should 
surpass the number of 
blockchain equity deals 
in October 2017.
Ethereum price vs. cumulative blockchain equity deals, ICOs
2016  2017 YTD (10/04/2017)
$15 
$388 
$391 
$292 
30
130
190
250
93
157
259
282
Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 ETH/USD 
Completed ICOs (cumulative)
Blockchain Equity Deals (cumulative)
Sources: CB Insights, TokenData, CoinSchedule, EtherScan.
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#BlockchainCBI
Blockchain startups turn 
to ICOs for funding, as 
capital floods sector
Total funding raised by 
ICOs surpassed total 
funding raised via 
traditional equity 
financing for the first 
time in Q2'17.
Year-to-date, ICOs have 
closed more than $2B in 
funding, with many ICOs 
still ongoing and 
hundreds more 
scheduled.
Blockchain equity funding vs. ICO funding
Q1'16  Q3'17
$179
$161
$122
$83
$130
$248
$259
$12
$21
$21
$39
$38
$757
$1,327
Q1'16 
Q2'16 
Q3'16 
Q4'16 
Q1'17 
Q2'17 
Q3'17 
Blockchain Equity Funding ($M)
ICO Funding ($M)
Sources: CB Insights, TokenData, CoinSchedule.
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#BlockchainCBI
Tokens offer immediate 
liquidity, differ from 
traditional VCs
Brand-name VCs have 
invested into 
cryptocurrency hedge 
funds (as both LPs and 
GPs) and tokens directly.
Over 70 cryptocurrency 
funds have sprung up 
since the start of 2017, 
many with venture funds 
as investors.
VCs invest in tokens, cryptocurrency funds
34
#BlockchainCBI
ICOs span the spectrum
Teams holding ICOs are 
building decentralized 
blockchain applications 
across verticals, ranging 
from asset management 
to social networks to 
prediction markets.
134 blockchain startups with ICOs
Closed ICOs greater than or equal to $500K, 2014  2017 YTD (09/08/2017)
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#BlockchainCBI
THE SEC FILED FRAUD CHARGES 
AGAINST 2 'INITIAL COIN OFFERINGS'
October 1, 2017
TEZOS RAISED $232 MILLION IN A HOT COIN 
OFFERING, THEN A FIGHT BROKE OUT
October 19, 2017
Cause for alarm?
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#BlockchainCBI
"Token logic" louder than over-capitalization concerns
$1,186
$1,316
$1,232
$1,197
$1,434
$1,279
$1,406
$12
$21
$21
$39
$38
$757
$1,327
Q1'16 
Q2'16 
Q3'16 
Q4'16 
Q1'17 
Q2'17 
Q3'17 
Tech Angel & Seed Equity Funding ($M)
ICO Funding ($M)
$158
$70
$51
$63
$52
$183
$73
$12
$21
$21
$39
$38
$757
$1,327
Q1'16 
Q2'16 
Q3'16 
Q4'16 
Q1'17 
Q2'17 
Q3'17 
Blockchain Early-Stage Equity Funding ($M)
ICO Funding ($M)
Blockchain early-stage equity funding vs. ICO
Tech angel & seed equity funding vs. ICO
Q1'16  Q3'17
Q1'16  Q3'17
Note: "Blockchain Early-Stage" includes Angel, Seed, and Series A.
Sources: CB Insights, TokenData, CoinSchedule.
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#BlockchainCBI
Steven Peikin
Co-Director, SEC Division of Enforcement
"As with any kind of newsworthy 
event, roaches kind of crawl out of 
the woodwork and try to scam 
money off of investors."
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#BlockchainCBI
Self-regulation could 
rein in runaway ICOs
The SAFT proposes a 
forward contract; 
accredited investors 
purchase securities that 
convert into tokens once 
the network is functional.
SAFT: The Safe Agreement for Future Tokens
October 2, 2017
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#BlockchainCBI
The apple might not fall 
too far from the tree
Ignoring the critics, if you 
had bought $100 of 
bitcoin on January 1, 
2011, it would be worth 
upwards of $1.7M today.
While ICOs catch the eye 
of  scam artists and 
regulators alike, 
decentralized token 
technology is certainly 
innovative, and perhaps 
fundamentally disruptive.
Annual Bitcoin "obituaries"
2010  2017 YTD (10/18/2017)
1
6
1
15
28
39
28
58
2010
2011
2012
2013
2014
2015
2016
2017 YTD
Bitcoin Obituaries
Source: 99Bitcoins.
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The Rise of Initial Coin Offerings
Conversation and Q&A
@cbinsights
#BlockchainCBI
41
#BlockchainCBI
Blockchain Corporate Investment
Private Blockchains and Consortia
42
#BlockchainCBI
Since 2012, corporates have participated in
140+ equity deals
closing for over
$1.2B
43
#BlockchainCBI
Financial services firms 
express the most 
interest in blockchain
Since mid-2014, more 
than 50 of the world's 
largest financial services 
institutions have made 
direct investments in the 
sector.
Financial services firms invest early in blockchain
Equity deals Q2'14  Q2'17
Note: By date of first investment.
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#BlockchainCBI
After 2016 dip, record 
number of corporates 
invest in sector
The number of active 
corporate investors  at 
91 in 2017 YTD  is 
closing in on the same 
metric for VCs, which 
has seen 95 active 
investors in 2017 YTD.
Blockchain annual active investors by type
Equity deals 2012  2017 YTD (10/08/2017)
3
18
89
69
91
6
40
100
113
90
95
2012
2013
2014
2015
2016
2017 YTD
Corporate & CVC
Venture Capital
Note: Corporate & CVC includes diversified financial institutions, investment banks, and merchant banks.  
45
#BlockchainCBI
Corporates continue to 
make direct blockchain 
investments
Corporate participation in 
blockchain equity deals 
and funding is set to rise 
in FY 2017.
Blockchain annual corporate participation
Equity funding (excluding ICOs) 2012  2017 YTD (10/08/2017)
Note: Corporate & CVC includes diversified financial institutions, investment banks, and merchant banks.  
$3 
$75 
$375 
$390 
$327 
1
4
20
33
43
42
2012
2013
2014
2015
2016
2017 YTD
Corporate Participation ($M)
Deals
46
#BlockchainCBI
Top corporate investors 
invest in far-ranging 
applications
Google comes in second, 
with 6 investments that 
span data storage (Storj), 
financial services 
(LedgerX), and merchant 
services (Veem).
Most active corporate blockchain investors
2012  2017 YTD (10/03/2017)
Note: Corporate & CVC includes diversified financial institutions, investment banks, and merchant banks.  
Investor
Rank
Select Companies
Orb
R3
Ripple
Kraken
Coinplug
Veem
Wirex
bitFlyer
1
Storj Labs
Blockchain
Ripple
LedgerX
Buttercoin
Veem
2
Settlemint
Factom
Ripio
Symbiont
Bitt
Peernova
3
Digital Asset
R3
Axoni
Cobalt
Chain
4
Digital Asset
R3
Axoni
Circle
5
2012 - 2017 YTD (10/03/2017)
Note: Goldman Sachs has since left R3.
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#BlockchainCBI
William Mougayar
Author, The Business Blockchain
"[Consortia] are hard. Pulling diverse companies to 
work together is not easy. You need disciplined 
processes, persistence, patience, a tolerance for some 
politics and lots of maturity."
Consortia present promise and peril
48
#BlockchainCBI
Indy
Hyperledger members and notes
Iroha
Fabric
Burrow
Sawtooth
Lake
About
 Modular blockchain
 Governed by the Linux Foundation
 Permissioned/private blockchains
Use Cases
 Five modules allow for range of custom 
use cases
 Supply chain and logistics
Road Ahead
 Pilots and proofs-of-concept
 Incorporation of smart contracts
 Interoperability with other consortia and 
blockchains, most notably ethereum
Note: Members listed are not exhaustive of consortium's members.
49
#BlockchainCBI
48% 
27% 
21% 
3% 1% 
North America
Europe
Asia
Unknown
South America
About
 Largest open-source alliance
 Connecting corporates with blockchain SMEs
 Native cryptocurrency, ether (ETH)
 Permissionless (questions of scalability, privacy)
Use Cases
 Generic platform allows for cross-vertical cooperation
 Hybrid blockchains (public-private)
 Supply chain/logistics
Road Ahead
 Structuring alliance governance
 Launch of seven working groups
 Standards-setting
Note: Members listed are not exhaustive of consortium's members.
Source: Enterprise Ethereum Alliance.
Enterprise Ethereum Alliance members and notes
EEA members by continent
50
#BlockchainCBI
About
 Enterprise 'global consensus ledger' software for cross-
border payments and remittance
 Native cryptocurrency, ripple (XRP)
 Geographic consortia (e.g. Japan)
Use Cases
 Interbank transfers and payments
 Retail remittances
 Supports any token/unit of value
Road Ahead
 Building out administered geographic consortia
 Custom enterprise software offerings
 Distinguishing between XRP and Ripple
Ripple investors and notes
Note: Investors listed are not exhaustive of consortium's members.
51
#BlockchainCBI
About
 Corda distributed ledger technology
 Smart contracts incorporating legal contracts
 Permissioned, private
 Working with regulators, leading financial institutions
Use Cases
 Financial services
 Relatively closed ecosystem and non-modular 
architecture leave little room for experimentation
Road Ahead
 Interoperating with other consortia and 
blockchains
 Rolling out Corda and continuing development
A red line denotes an 
investor that has since left 
the consortium.
R3 investors and notes
Note: Investors listed are not exhaustive of consortium's members.
52
#BlockchainCBI
Key Takeaways
The Road Ahead
53
#BlockchainCBI
Key Takeaways:
 Initial coin offerings have raised more than $2B in 2017 YTD.
Total ICO deals and funding are increasing at a faster clip than traditional 
equity deals and dollars.
 Mega-deals push equity funding up, but growth slows as ICOs take hold.
Traditional equity deals and funding could see their highest annual totals 
ever, although the number of teams raising via ICOs is increasing faster.
 Corporate investment is set to rise in 2017.
The number of unique active corporate investors has hit a high of 91 in 
2017 YTD, and is closing in on the number of active venture capital 
investors participating in equity financings.
54
#BlockchainCBI
Key Takeaways:
 ICOs look to remain the financing method of choice for blockchain startups.
On a quarterly basis, total funds raised by ICOs surpassed total funds 
raised via traditional equity financing for the first time in Q2'17.
 More VC firms are investing in cryptocurrency hedge funds and tokens directly.
Brand-name investors placing bets on top ICOs could signal institutional 
interest in this most recent wave of blockchain innovation.
55
#BlockchainCBI
 Venture investors are still looking for real blockchain usage beyond speculation. 
Users are necessary for the sector to mature beyond speculation.
 Teams holding ICOs have yet to seriously collaborate with regulators to develop 
strong legal frameworks. Without uniform self-regulation, state bodies will 
have to step in.
 Corporate investors will have to take a hard look at their blockchain bets. With 
recent successful pilots thrusting the technology back into the spotlight, 
corporate investors will continue to seek concrete solutions through 
direct investments and consortia memberships.
The Road Ahead:
56
#BlockchainCBI
Blockchain In Review
Conversation and Q&A
@arieh313
@rhhackett
@cbinsights
#BlockchainCBI
57
#BlockchainCBI
CBInsights.com
@ cbinsights
+1(212)292-3148
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