CO fundraising is still strong despite increased attention on the part of regulating bodies and saturation of the market. Still, compared to an average seed round venture investment (even considering bias we get due to our dataset’s nature), amount raised stands quite high.
This could easily be explained. Not only a bulk of investors are coming from the crypto world, with their understanding of it (or self-confidence) deep enough to invest in Blockchain-related projects more eagerly, but with “it is new Ethereum/Bitcoin” being a recurring theme in projects’ pitches. All of the market participants were more enthusiastic about investing into “new economy” projects rather than into projects we could label as “traditional,” often with no apparent need for cryptocurrencies/Blockchain technology at all. As for fintech projects, this area has become quite naturally the first field for testing of Blockchain capability for real-world problems.
According to research by The BB Fund, based on the data tokendata.io, more than $5.3 bln was raised via ICO in 2017 with $5.1 bln attracted for the last nine months. There were 1,331 analyzed and only projects raising over $1 mln were considered.
Volume af capital raised at ICO by month
Number of big projects
According to the research, 60 percent of ICOs have been profitable so far: median return is 2x.
Average amount raised via ICO
Average investment per project
The categorization is quite subjective and is organized as follows:
“Blockchain” category represents all Blockchain infrastructure-related projects.
“Cards & Payments” stands for a very broad category of projects, from merchant-serving payment processors to crypto wallets with built-in p2p transfers and other functions.
“Decentralized Market” consists of projects, which usually relied in their description on familiar cliché “Decentralized XYZ” – ranging from services’ markets (shipment, logistics, taxi drives) to goods markets (real estate, electricity) and universal markets, aiming any type of good/service imaginable.
While the majority of these projects do not benefit from Blockchain, implement things already implemented and suffer from lack of resources, some of them seem interesting and could be able to survive and prosper.
“Crypto Market” category includes any type of exchange or exchange-like vehicles dedicated to crypto.
“ICO platform” may refer not only to such platforms but also to accelerators, startup clubs and any sort of a project, which claims it is developing an ecosystem of investors, teams and crypto enthusiasts.
“Identity Verification” and “Advertising” are broad categories, too, with the first one including projects with an emphasis on verification – from people’s identity to identity of food products and content. The second segment includes everything advertising-like – lead generation, promotion, brand influencers’ network.
Among other categories we would like to specifically mention businesses referred to as being “commodity”-backed. This term, again, doesn’t always stand for a commodity in common sense (gold or zinc oxide), but also for any tangible real-world asset, which either used as a sort of collateral or may be handled as such.
This distribution not only reflects bigger interest toward Blockchain infrastructure/fintech projects but also higher costs of development of them due to bigger development workload (Blockchain), license and integration-attributed costs (fintech). While valuations and investment attracted are rarely substantiated, investors more willingly allocated larger amounts of money to projects with high capital costs.
Also, we could observe sorrowful tendency of poorer-quality projects to originate in Decentralized Market/Betting segments, with seemingly no diversification and original ideas behind them in many cases.