You may think that blockchain is a breath of fresh air and a sign of a better future to come. You may think that crypto is a stain on the face of humanity, a scam of all scams and Michael Saylor with his bombastic utterances on Bitcoin is the devil himself. It doesn’t really matter where you stand on all that because venture capitalists have already voted on the industry’s future and are throwing vast amounts of money at it.
According to all indicators, investments into crypto-related companies set new records in 2021, and so far, 2022 shows no sign of slowing down. Data from numerous VC funds and recent funding rounds point to the robust deal flow in the crypto market. For example, data from PitchBook’s “Cryptocurrency/Blockchain” sector for January shows that it was responsible for about as much funding as all startups in Africa received in Dec 2021.
So let’s take a look at a few data points showing how rapid is the pace of investment into crypto-focused startups, and how firmly it has shaped up the welcoming markets in 2021. Let’s cast a quick glance at some of the developments in blockchain and crypto that give investors all the assurances they need to go to the Moon in 2022.
FTX: $900 million
Deal date: July 20, 2021
VC Round: Series B
Notable investors: Paradigm, Sequoia Capital, Ribbit Capital, Third Point, Lightspeed Venture Partners, Coinbase Ventures, Softbank, Sino Global Capital, Circle
Post-money valuation: $18 billion
Previous valuation: $1.2 billion
The recent fundraise by FTX drew a host of headlines. Any time a private company scales its private-market valuation to the range of dozens of billions, it’s hard to ignore. That FTX raised $400 million for its main business — at a $32 billion valuation — less than a week after the company raised $400 million for its U.S.-based operations at an $8 billion valuation did not garner the shock that it should. That’s a humongous sum of cash, and at prices that indicate that FTX sold a total of around 2% of the shares in both companies, or $800 million worth of investment into $40 billion worth of equity value.
But that’s not the only recent news event that underscores how big the crypto bets may prove in 2022. Alexis Ohanian’s Seven Seven Six venture firm just announced $500 million in two funds, that, per The Wall Street Journal, it will “invest primarily in crypto startups.”
Circle: $440 million
Deal date: May 28, 2021
Notable investors: Fidelity Management and Research Company, Marshall Wace, Digital Currency Group, FTX, Breyer Capital
Post-money valuation: N/A
Previous valuation: $3 billion
The payments and treasury infrastructure provider, Circle is best known as one of the principal developers of stablecoin USDC, which has grown by more than 3400% this year. The asset now stands at over $27 billion in circulation and the company claims it has supported more than $785 billion in on-chain transactions. On July 8, Circle announced plans to go public via a merger with Concord Acquisition Corp., a publicly-traded special purpose acquisition company led by former Barclays CEO Bob Diamond. The transaction valued the firm at $4.5 billion.
Ledger: $380 million
Deal date: June 10, 2021
VC round: Series C
Notable investors: 10T Holdings, Cathay Innovation, Draper Esprit, Draper Associates, Draper Dragon, DCG.
Post-money valuation: $1.5 billion
Previous valuation: $287.1 million
Ledger produces hardware wallets, dedicated devices used to store digital assets. It has sold more than 3 million hardware wallets in 190 countries to date and counts more than 1.5 million monthly users on Ledger Live, a mobile companion to the Ledger hardware wallet which allows users to manage and store their assets. The company has integrated with platforms like Coinify, a crypto payments and exchange platform; Changelly, a crypto exchange; and Compound, a decentralized crypto borrowing and lending platform.
BlockFi: $350 million
Deal date: March 11, 2021
VC round: Series D
Notable investors: Bain Capital Ventures, partners of DST Global, Pomp Investments, Tiger Global, Susquehanna Government Products
Post-money valuation: $3 billion
Previous valuation: $435 million
Founded in 2017, New-Jersey-based BlockFi is now one of the leading cryptocurrency lending providers. Its products span multiple categories including crypto-collateralized loans and interest-bearing accounts through which investors can earn interest on their crypto holdings. Rumors of BlockFi’s potential IPO started to circulate last July following reports of a job opportunity, part of which involved helping the company go public. Last month, Texas, New Jersey and Alabama regulators began questioning the legality of the firm’s BlockFi Interest Account (BIA) offering.
Solana Labs: $314 million
Deal date: June 9, 2021
VC round: Private placement token sale
Notable investors: Andreessen Horowitz, Polychain Capital, Alameda Research, Blockchange Ventures, CMS Holdings.
Post-money valuation: N/A
Previous valuation: N/A
A proof-of-stake blockchain challenger to Ethereum, Solana claims to deliver both improved scalability and speed. According to data from blockchair, the network is capable of processing more that 1,000 transactions per second (TPS), compared to Ethereum’s 14 TPS. Solana has facilitated more than 19 billion on-chain transitions to date and hosts a range of decentralized products including Serum, a decentralized exchange founded by billionaire FTX founder Sam Bankman-Fried.
Fireblocks: $310 million
Deal date: July 27, 2021
VC round: Series D
Notable investors: Sequoia Capital, SCB 10X (the venture arm of Siam Commercial Bank), Coatue, Stripes, Spark Capital, DRW VC
Post-money valuation: $2 billion
Previous valuation: N/A
The New York cryptocurrency custodian provides an enterprise-grade platform for moving, storing, and issuing digital assets, including bitcoin, Ethereum, Polkadot and others. A key differentiating feature for Fireblocks’s custodial offering is its use of a novel form of wallet security known as multi-party computation (MPC), which enables multiple parties – each holding their own private data – to evaluate a computation without ever revealing any of the private data held by each party. Since its inception in 2019 Fireblocks has secured over 1 trillion in digital assets.
Dapper Labs: $305 million
Deal date: March 30, 2021
VC round: 5th round
Notable investors: Coatue Management, Andreessen Horowitz, Michael Jordan, Kevin Durant
Post-money valuation: $2.6 billion
Previous valuation: N/A
The Vancouver-based startup is best known as the developer of NBA Top Shot, an NFT marketplace for basketball video highlights or “moments.” The project, which has already surpassed the $500 million mark in trading volume, is largely responsible for the boom of non-fungible tokens (NFTs), essentially digital proofs of ownership trackable on a blockchain. Earlier, Dapper Labs developed a popular Ethereum game of breedable collectibles called CryptoKitties.
Paxos: $300 million
Deal date: April 29, 2021
VC round: Series D
Notable investors: Oak HC/FT, PayPal Ventures, Declaration Partners, Liberty City Ventures, Bank of America
Post-money valuation: $2.4 billion
Previous valuation: N/A
Paxos’ technology powers crypto brokerage services of PayPal and PayPal-owned Venmo, which enable millions of users to buy, hold and sell bitcoin and a handful of other major cryptocurrencies. The company’s other products and services include a U.S.-dollar backed stablecoin Paxos Standard (PAX), cryptocurrency exchange itBit and an equities settlement service used by Credit Suisse, Societe Generale and Instinet, the trading arm of Nomura Holdings.
Blockchain.com: $300 million
Deal date: March 24, 2021
VC round: Series C
Notable investors: partners of DST Global, Lightspeed Venture Partners, VY Capital
Post-money valuation: $5.2 billion
Previous valuation: $3 billion
Blockchain.com provides a variety of crypto services to retail and institutional clients but is most famous for its non-custodial digital wallets. Unlike its counterparts controlled by third parties, these wallets give users full control over their private keys that represent ownership of crypto assets. The London-based company claims it has processed 28% of all bitcoin transactions since 2012.
Bakkt: $300 million
Deal date: March 16, 2020
VC round: Series B
Notable investors: Intercontinental Exchange (ICE), BCG Digital Ventures, PayU
Post-money valuation: N/A
Previous valuation: N/A
In February 2020, the crypto venture of ICE (the New York Stock Exchange owner) announced the acquisition of Bridge2 Solutions, provider of loyalty programs, to power Bakkt’s one-stop-shop retail platform. Called Bakkt App, the service lets users aggregate various digital assets including loyalty points, rewards programs, gaming assets and cryptocurrencies in a single wallet. In January, Bakkt announced it is going public via a SPAC merger with VPC Impact Acquisition Holdings at an enterprise value of about $2.1 billion. Upon the deal’s closure, the combined company will list on the New York Stock Exchange as Bakkt Holdings, Inc.
