Digital Currency Group has shared some data from the funding rounds it took part in between 2016 and 2018 to provide some insight into the blockchain industry. DCG invests mainly in young companies, so it’s no surprise 72 out of 127 investments it made were seed investments, followed by 36 Series A, 15 Series B, and 4 Series C+.
According to DCG, all startups, including U.S.-based blockchain companies, have been getting more seed round funding. “The average seed round we joined in the U.S. grew from $1.94mm in 2016 to $3.24mm in 2018 (+67%),” DCG writes. It believes the size of the investments shows that those who used to be sceptical about the cryptocurrency sector are now supporting it.
On the other hand, even though funding has gotten bigger, valuations skyrocketed in 2017 and then plummeted in 2018.
Since international deals are much cheaper than in the U.S., DCG invested in more companies abroad—11 seed deals as compared to eight in the U.S. However, their size was significantly smaller, and they were, on average, 60 per cent cheaper. According to DCG, “as more VC and crypto funds are raised outside the US, and as US investors become more comfortable investing aboard, we’re seeing international valuations start to rise.” Due to the interest, the average valuation for an international seed stage deal surged by 34 per cent for DCG.
DCG also claims seed rounds are becoming bigger and pricier—their sizes increased 75 per cent while valuations increased by 31 per cent.