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Blockchain Venture Capital Funding Reaches $822 Million in 2019

Outlier Venture’s State of Blockchain report identifies steady building for blockchains in spite of bear market conditions

Blockchain and Web 3.0 venture capital firm Outlier Ventures has published its State of Blockchains Q2 report providing an overview into blockchain investment and market trends in 2019. According to the report, blockchain start-ups raised $822 Million from 279 separate VC deals during the first half of this year. 159 of the total 279 deals related to blockchains, were seed stage ones. This indicates that entrepreneurial zeal in the ecosystem has not declined in spite of the bear market.

Enterprises are no longer building proofs of concepts for the industry. They are increasingly embracing the ethos of the industry by rolling out fully developed open-source projects and contributing to the community’s overall traction and growth. EY, JP Morgan and Target have each released open-source code over the past six months, highlighting blockchain use cases in the financial services and retail sectors.

Lawrence Lundy-Bryan, Partner and Head of Research at Outlier Ventures, comments:

“Compared to the outsized performance of the 2018 bull market, large venture capital raises within the blockchain space have diminished in frequency. However, cryptocurrency exchanges despite increased regulatory activity continue to be a strong favourite for investors – Bithumb exchange alone raised $200 million.

Another macro-trend we are witnessing is direct investments into protocols in exchange for both tokens and equity. Exchange Listings in the form of Initial Exchange Offerings (IEOs) have begun capturing public attention over the first half of this year. They are a resurgence of the ICO model, with exchanges offering immediate liquidity to digital asset holders through a listing.”

Looking Ahead…

The inflection point for blockchain and crypto assets more generally may be here with the announcement of Facebook’s Libra. Over 100 different enterprises, each contributing $10 million to back the project, are reported to be collaborating on bringing its own native cryptocurrency, which some refer to as a more restricted form of digital currency, to the global masses. Whilst concerns about misuse of user data and loss of privacy continue, Facebook’s very public commitment promises some much needed legitimacy to the space.

Jamie Burke, CEO at Outlier Ventures, comments:

“The Facebook Libra initiative has polarised the crypto industry. On the one hand they and their partners bring some much needed legitimacy to the space after the craziness of ICOs and of course the promise of billions of users. However, many feel what is being proposed is more of a Web 2.5 incremental innovation which stops short of the true potential of cryptocurrencies. Furthermore, there is a deep mistrust of Facebook’s intentions and their ability to resist the holy grail of connecting the financial data of Libra with the social data of their media platforms.”

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