Outlier Ventures Reveals Blockchain Investments on the Rise, With Focus on AI and FinTech
Venture-as-a-Stack focused firm, Outlier Ventures has recently released a report which depicts the rise in blockchain investments.
The report further broke down matters in terms of the key focuses, how things have changed now compared to 2013, and different stages of financing to name a few.
Artificial Intelligence and FinTech Takes a Large Slice of the Pie
In today’s society, the key areas of interest include artificial intelligence (AI) and FinTech amounting to 33.8 percent. With that said, the report suggests that Bitcoin’s network effects have led to a change in view – going from cryptocurrency to convergence application. Besides AI, the next big area of interest rests in data and ownership.
Blockchain Deals Nine Times More Now Than Back in 2013
More blockchain projects and support has been witnessed in 2019 compared to 2013. This is based on the increase in the number of seed stages (i.e. early stage financing). While this is a good start, it does not seem to be sustained over the course of time, as “follow on rounds are rare.”
This according to Outlier Ventures implies that “capital is cheap, companies are struggling to find product-market fit.” Interestingly, Bitcoin appears to play a role in blockchain deals. It turns out that investors’ “appetite for backing blockchain” comes as a result of Bitcoin’s rise in value. When the giant crypto dropped, investors’ eagerness also fell with it. Therefore,
“funding is cyclical [which] adds to the uncertainties equity-based token startups have.”
All-in-all, today’s blockchain industry sees high financing earlier on, with the average funding raised roughly $1.18 million. However, “follow on-rounds” rarely see such numbers. Blockchain businesses that have failed to date are due to numerous concerns including regulations, change in investors’ interest and lack of traction.
Speaking more on investors’ appetite, users need to be aware that it varies on a region-to-region basis, which implies, “making free and fair competition impossible for what is fundamentally a global innovation.” That said, cities appear to be in favor of FinTech-based blockchain projects, with San Francisco taking the lead globally followed by London, Singapore, Beijing and New York to name a few.
Ultimately, not only is fundraising’s cyclical nature a possible hindrance, but also how sustained fundraising is and where the business is operated makes a whole lot of a difference.
Click here to review the entire report: https://www.slideshare.net/OVioHQ/investments-in-blockchains-2019-outlier-ventures-163458637.