The number of corporate investors in blockchain companies reached a record high of 91 this year, with Google and Goldman Sachs among the most active investors. Till now, there have been 42 equity investment deals by corporations this year, totaling $327 million.
SBI Holdings, having stakes in eight blockchain firms, is the most active corporate investor. Google comes second, with investments in both blockchain, and Ripple. Overstock.com is third, while US banks, CitiBank (CB) and Goldman Sachs, are in fourth and fifth place, respectively. Both have invested in Digital Assets Holding. CB Insights reported:
"Big banks and financial services firms were the first corporate players to make direct blockchain investments en masse — unsurprising, given how Bitcoin’s underlying technology lends itself, both technically and in popular thought, to financial services."
The 10 largest US banks by asset have participated in nine rounds since 2014, totaling $267 million in disclosed funding to six blockchain companies. At the same time, banks wanting to explore and develop blockchain technology are working with Hyperledger, the Enterprise Ethereum Alliance, Ripple, and R3.
The interest in blockchain technologies has also brought in bigger investments from sources like venture capitalists and ICOs. At the current rate, 188 equity deals can be predicted this year, worth more than $830 million. This is an increase of 138 deals and $545 million from 2016. Mega deals, such as the $107 million raised by R3 and the $100 million raised by Coinbase, have contributed a lot to boost this figure.
Total funds raised via traditional equity financing were outpaced by the total funds raised by ICOs, for the first time in the second quarter of 2017. According to Coinschedule, more than $3 billion has been raised via ICOs. Filecoin, which raised $257 million, is among some of the biggest ICOs. With the ICO craze, however, the risk of over-capitalization also comes with teams receiving too much money too quickly.
Only 28 out of 103 blockchain companies that received angel funding from 2013 to 2014 managed to raise any further money. Also, about 46% of the 1,098 tech companies that raised seed funding in the US between 2008 and 2010 also succeeded in raising funds in the second round.
With its companies failing at a higher rate than tech startups in other areas, blockchain’s consolidation may be tight, as reported by CB.