February 26, 2016
Bitcoin, as any cryptocurrency, is quite a debatable topic. The opinions are diverse when it comes to the question of security and other risks related to cryptocurrency. There are even some compelling reasons why bitcoin may be dead soon. Despite warning signs, global banks are actively getting into the race of developing their own digital cash.
Regardless of the opinions on bitcoin and other digital money, there are still successful and growing FinTech companies working with the cryptocurrency are attracting significant funds. In fact, the funding for bitcoin companies hit almost half a billion ($490.48 million) in 2015 across 66 deals.
Most of the companies that raised funds are bitcoin companies providing financial services – 39%, the second place is held by bitcoin companies offering infrastructure – 17% and bitcoin exchange platforms raised 14% of the total funds.
Speaking of the amounts raised, out of almost half a billion, more than half was raised by bitcoin companies providing universal services. The ones in the financial services segment are responsible for 18% of the funds, and bitcoin companies working with infrastructure have attracted 10% of the total funds.
It’s interesting that bitcoin companies providing universal services represent only 9% of the deals, but make 51% of the money in cryptocurrency. Bitcoin wallets are the last ones everywhere – they represent 6% of the companies and raised 1% of the total funds.
More than half of the bitcoin companies funded in 2015 were from the US (54%). Bitcoin companies from the Netherlands represent the second largest group with 6% of the companies from the Nordic country and the third place is held by Japan, Germany and France – 5% each.
About 66% of the bitcoin companies have raised funds in seed rounds, 18% – first round, and 11% – second round. The most fruitful time for bitcoin companies was in January, when 18% of the deals were closed. About 12% of the deals were closed in September while in both June and February each, bitcoin companies closed 11% of the total deals. August was quite a dry season as only 3% of the deals were closed that month.
While FinTech companies around the world raised almost a billion in December 2015 only, bitcoin companies were responsible for only around $7 million in the same month.
Finally, on a more detailed level, let’s look at the investors that poured the most money in certain bitcoin companies.
Coinbase (universal) is holding the second place with $75 million and a list of investors including NYSE, USAA, BBVA, DOCOMO, DFJ Growth Fund, Tim Draper, Union Square Ventures, Ribbit Capital and Andreessen Horowitz and others.
Ripple Labs (financial services) raised $32 million from US futures, CME Group, Seagate Technology, AME Cloud Ventures, ChinaRock Capital Management, China Growth Capital, Wicklow Capital, Bitcoin Opportunity Corp, Core Innovation Capital, Route 66 Ventures, RRE Ventures, Santander InnoVentures, Vast Ventures and Venture 51.
In January 2016, bitcoin companies raised $68.49 million in total and as the LTP team is attentively following the space, we will further be updating information on funding in the cryptocurrency space.