Crypto-corn? Unicorn number explodes as venture capital investment rises in crypto – Crunchbase News

[ad_1]

As venture capitalists continue to flood the crypto and digital asset space with more money, a stampede of unicorns emerges like everything the space has never known.

Subscribe to Crunchbase Daily

According to data from Crunchbase, 18 unicorn companies valued at $ 1 billion or more were established this calendar year. That’s about two-thirds of the total number of unicorns in the crypto space in total.

These valuations were boosted by the more than $ 12.1 billion in venture capital invested globally in the crypto industry, three times more than last year.

For a long time, many investors have been looking, said Spencer Bogart, general partner of San Francisco-based Blockchain Capital, which has invested in crypto unicorns such as Coinbase, Paxos, Kraken, Blockstream and others. Now, you’ve just got a lot of people come.

Why now?

There is no hot trend or complicated explanation as to why crypto has its time right now, say those in the industry. Rather, it’s the maturation of the industry and everything that goes with that development that makes companies like Bitpanda, Ledger, and BlockFi reach the magical unicorn mark.

One of the main aspects of this maturation is the building of the ecosystem around crypto, which is now starting to build its own billion dollar companies. While exchanges like Coinbase and San Francisco-based Kraken may come to mind first when thinking about buying and selling crypto, several layers are being built in the industry to help. people to manage, report and secure digital assets.

This year alone, companies that have raised large amounts of cryptocurrency offering various services include:

French security and infrastructure solutions provider Ledger raised a $ 380 million Series C at a valuation of $ 1.5 billion in June. New York-based Fireblocks, which helps solve a variety of digital asset business issues, from security to compliance to governance, has raised a $ 310 million Series D at a valuation of $ 2.2 billion. dollars in July. New York-based Paxos, which is building infrastructure to enable movement between physical and digital assets, raised a $ 300 million Series D to a valuation of $ 2.4 billion in April.

Bogart said there is huge interest in investing around companies in the crypto industry that help with compliance, tax and accounting, and insurance, as well as digital wallets.

There is certainly growing interest in pickup and shovel companies in space, said Austin Woodward, co-founder and CEO of Utah-based TaxBit, which provides tax and accounting software to help with calculations. taxes and reports on cryptocurrency transactions.

Big checks

TaxBit recently became a unicorn in the crypto space when it closed a $ 130 million Series B earlier this month. The company has raised $ 230 million this year alone.

Woodward said the company has increased its Series A and B series roughly seven months apart due to faster-than-expected growth, as well as strong investor interest in the company.

We just had people who couldn’t compete in the (Series A) round, he said. Then we took some key steps. We did it a lot faster than expected, so we decided to relaunch.

TaxBits Series B is a good example of another trend seen in the crypto industry: strong growth and institutional investors exploring the digital asset space and dedicating entire teams to the search for investment opportunities.

Big companies like Tiger Global, Insight Partners, Coatue, Sequoia Capital, and others have all made significant investments in the space, pumping more money into fundraising cycles and helping to boost valuations.

Compared to years past, you only see a lot more late stage investors in the space, Bogart said. These companies need to roll out big checks and they now have people dedicated to that space.

Legitimacy and regulation

The adoption of the crypto world by banks, investment institutions, and more traditional businesses has likely helped revive many large growth firms and institutional investors in the space after years of reluctance.

Financial services companies like Visa and PayPal have made clear bets in the industry, and even Facebook has plans for its own digital wallet and currency, now called Diem.

I think people think there is more legitimacy now, said Bradley Tusk, CEO and co-founder of Tusk Venture Partners, who has invested in crypto companies like Coinbase and Circle.

Companies going public in the space like Coinbase, Circle and Robinhood have also further justified the space, especially with investors now clearly able to see the volume handled by these companies.

I think that’s very validating, Tusk said.

While many crypto-like industries currently inundated with venture capital could potentially experience a slowdown, investment and general economic interest in the space shows that it is now an accepted financial tool, a added Tusk.

Although crypto has recently been in the headlines of regulatory issues, including China’s crackdown on mining over energy concerns and issues with unclear language regarding crypto in the President Joe Bidens’ $ 3.5 trillion infrastructure, Tusk does not view regulation as a hurdle for the industry, but rather as an opportunity.

I think what you see with the number of unicorns and the amount of investment is that it’s not going anywhere, he said. This should resonate with regulators. It is a great economic opportunity and you cannot bury your head in the sand.

It’s real and it’s something you have to deal with, he added.

Methodology

Crypto, as defined in this article, includes startups in the Crunchbase dataset that work in the cryptocurrency and blockchain industries.

Illustration: Li-Anne Dias

Keep up to date with the latest rounds of fundraising, acquisitions and more with Crunchbase Daily.

[ad_2]