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Blockchain start-ups raise record funding despite slumping cryptocurrencies

A diagram showing a price chart and cryptocurrency Bitcoin in the background.

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Despite the plunge in cryptocurrency prices, blockchain start-up funding exceeded $ 4 billion for the first time in the second quarter.

According to data from analytics firm CB Insights, companies in the early industry raised a record $ 4.38 billion, up more than 50% from the previous quarter and almost nine-fold from the year-ago quarter.

Blockchain Underlying technology Behind most cryptocurrencies. This is essentially a digital ledger of cryptocurrency transactions distributed throughout the global network of computers.

The largest round of financing for blockchain companies in the second quarter was a $ 440 million investment in the payments and digital currency company Circle.Recently circle Announce plan to publish Through a $ 4.5 billion merger with a blank check company.

The ledger, where people are developing hardware wallets for storing digital currencies, attracted the second largest round in the quarter, raising $ 380 million. In a December interview, ledger CEO Pascal Gotier told CNBC that the crypto market is mature and involves key institutional investors.

“In 2018, financial institutions weren’t in the game when we raised the final round,” he said, and now “all the major financial institutions in the world have plans or We are working on a plan, “he invests in crypto.

Record financing is an alternative way for investors to gain exposure to the crypto industry by acquiring shares in private start-ups that develop technologies for digital currencies and the distributed networks that underpin them. Emphasizes what you are finding in.

Venture investors do not seem to be swayed by the fall in cryptocurrency prices. Bitcoin The value has more than halved since the U.S. crypto exchange reached a record high of nearly $ 65,000 in April. Coinbase It has been published.

Ether, the world’s second-largest digital coin, has also fallen by more than 50% since it hit a record high of over $ 4,000 in May.

CB Insight senior analyst Chris Bentsen told CNBC, “At current rates, blockchain funding will break the previous year’s record, more than three times the total amount raised in 2018. Probably. “

“Blockchain’s record funding year is being driven by growing consumer and institutional demand for cryptocurrencies,” he added. “Despite short-term price fluctuations, VC firms are still bullish on the future of crypto as a mainstream asset class and the potential of blockchain to make financial markets more efficient, accessible and secure.”

Andreessen Horowitz last month A fund focused on $ 2.2 billion cryptocurrencies.. “We believe that the next wave of computing innovation will be driven by cryptocurrencies,” wrote a Silicon Valley venture capital firm. Blog post..

FinTech FinTech Fundraising Enthusiasm

Funding for the entire FinTech company also set a new record. FinTech start-ups raised a spectacular $ 30.8 billion in the second quarter, up 30% from the previous quarter, and nearly the amount FinTech raised in the second quarter of 2020, according to CB Insights. It has tripled.

The European fintech sector gained significant traction, with 50% of the top venture transactions in the quarter directed to European companies. This trend was driven by growing interest from foreign investors in the continent’s fast-growing high-tech industry.

The German stock trading app Trade Republic has made the biggest round in Europe. $ 900 million bagging From Sequoia Capital and Peter Thiel’s Founders Fund. Settlement companies Square, Stripe, Adyen’s Dutch rival Mollie, Net $ 800 million..

Private FinTech’s reputation has also risen significantly, with Sweden’s now-paying company Klarna Market value of nearly $ 46 billion In June.

This has led to the fear of a potential bubble in FinTech. Iana Dimitrova, CEO of UK fintech startup OpenPayd, told CNBC that the upward trend in private funding rounds “has a negative impact on the long-term sustainability of the industry.” According to CB Insights, the average size of fintech transactions increased by 28% in the second quarter.

Is FinTech in the bubble?

Another FinTech boss, London-based Yapily’s Stefano Vaccino, disagrees. “I wouldn’t think of it as a bubble,” he said. “Financial services have accelerated in the last 12-18 months,” said Andreas Weiskam, a partner at Yapily investor Sapphire Ventures, as a “reflection of great opportunities” in digital finance. Said.

Raised $ 51 million in new funding this week, Yapily is one of many companies developing technology to drive new financial moves. Open banking, Bank data and payment initiation are intended to be disclosed to FinTech and other third parties.

Recently, open banking is gaining momentum on Visa. Agreed to acquire Tink, Swedish open banking starter, after $ 2.1 billion Failed to get plaid, Due to regulatory pressure, a similar company in the United States.Plaid Continued to raise $ 425 million British rival TrueLayer valuates $ 13.4 billion in April funding round Raise $ 70 Million..

Meanwhile, more and more FinTech are opening up the open market for the first time, with 19 companies announcing public or IPO plans in the second quarter.

UK Remittance Wise Published With a valuation of $ 11 billion in London earlier this month, Better.com, Dave,and Acorn Announced plans to make public through a merger with a special purpose acquisition company (SPAC).

In the world of cryptocurrencies, the cryptocurrency exchange Coinbase Big hit Nasdaq debut During April.

Blockchain start-ups raise record funding despite slumping cryptocurrencies

Source link Blockchain start-ups raise record funding despite slumping cryptocurrencies

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