Venture capital (VC) is fast becoming the new way to invest in blockchain companies outstripping ICOs, according to a new study.
VC investments generally come from hedge funds, private equity firms, or persons of extreme wealth, with the resources to invest funds into start-ups with the hopes of quality returns on the original investment.
The new study conducted by Diar, the weekly institutional publication on digital currency, assets, payments and regulation, suggests that the impetus has clearly shifted with VC companies now pouring their money into projects at a rising rate. VC research platform Pitchbook confirms that within the first nine months of 2018, USD 3.9 billion has been raised for VC blockchain enterprises, a 280% rise on the previous year.
The growing interest by venture capital companies in blockchain projects, juxtaposed against a diminishing number of ICOs, thought to be a result of government intervention and stricter rules being enforced on crypto startups who get their funding from ICOs.
The data also shows that the size of VC investments has gone up with the frequency, with median size of deals increasing over USD 1 million in this year alone, showing that as confidence in the industry grows, so does the preparedness to take a higher element of risk. The most active VC investor with 110 deals related to crypto and blockchain is Digital Currency Group (DCG), followed by Blockchain Capital and Pantera Capital with 100 deals.
On the heels of this latest news, Bitcoin News reported yesterday that South Korea’s largest VC company announced investments in TEMCO, a blockchain solution company for supply chain management built on the EOS network.
Korea Investment Partners (KIP) of Seoul has investments in over 50 companies, 20 private equity funds and a significant roster of partners all over the world. Its investment into TEMCO is of undisclosed value although according to a press release, it claims to be the first ICO funded by “major venture capital”.
In terms of where the new wave of venture capital is going to, reports suggest that the US, UK, and Switzerland top the list.
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