Venture investing has shifted over time, with VCs first backing companies exploring bitcoin as currency, then focusing on private blockchain providers catering to financial services and other verticals, and today investing in the token economy.
Continuing roadblocks in the sector include cryptocurrency price volatility, regulatory setbacks and scaling issues.
VC FUNDING TRENDS
The recent boom in cryptocurrencies and ICOs has had a material effect on the number of blockchain teams looking for financing, with traditional equity deals on track to set a new record of 188 in 2017, up from 138 in 2016.
VC-backed deals specifically should grow at a similar rate, to a run-rated 77 in 2017. Since 2012, over 650 equity deals to blockchain companies have totaled more than $2.1B.
The growth rate for equity deals and VC-backed deals is slower than the growth rate of ICOs. The highest annual growth for total VC-backed deals came in 2014, when deals grew 180% year-over-year.