Blockchain startups raised a record-breaking $1.8bn (£1.4bn) across more than 300 deals with venture capital (VC) investors in the last six months, as the industry doubles down on the technology behind cryptocurrency.
Data compiled by London-based blockchain specialist VC firm Outlier Ventures revealed investments into dedicated blockchain startups soared in the first half of 2018 despite a bearish mood from retail investors.
This was largely thanks to some major rounds from firms which have found a good market fit for the tech, such as China’s Bitmain which raised $400m in June ahead of planning a public listing later this year. For the sake of comparison, that sum is roughly the equivalent raised by the entire blockchain ecosystem in 2014.
Acquisitions of blockchain startups rose similarly, as M&A activity leaped to a new height of 30 deals so far this year. Coinbase has bought out seven startups in the last quarter alone, while Tron bought BitTorrent for $140m earlier this year.
Big businesses are also paying attention, with companies such as IBM, Facebook and Walmart all announcing some level of adoption in 2018.
Outlier’s chief executive Jamie Burke said M&A has now become a key macro-trend for the sector, as protocols start to launch their own venture funds and accelerators, as well as buy up equity-backed companies to scale development.
“What is now clear is that the space has broken free of much of the idealistic dogma,” he added.
Going forward, Outlier has pegged so-called stable coins – tokens pegged to the value of a fiat currency – as the next hot thing for investors to watch.
IBM recently partnered with Stellar to provide a dollar-backed stable currency, while crypto startup Circle is working towards issuing a similar coin plugged into its Poloniex exchange.
David Richards, co-founder and chief executive of distributed computing firm WANdisco, said the news of blockchain’s rise to power is unsurprising.
“It’s a perfect storm of the right technology being developed at a time when businesses and customers alike are seeking decentralisation in financial operations,” he said.
“By enabling parties to cut out the middleman from their transactions, it’s attracting investors’ attention and appealing to firms who seek greater transparency in payments and investments.”
“When we see the first applications go live, I expect we’ll see even greater investor engagement with the technology, and the UK is in a prime position to attract new waves of funding.”