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Diar Report Suggests Venture Capital Investment in Blockchain Companies is up 280% in 2018

Diar, a company that releases weekly institutional publications, have issued a report suggesting that venture capital firms have invested over 280% more into Blockchain firms in the year 2018 compared to the whole of 2017.

Back in 2013 Venture Capital (VC) firms invested around $250m; an increase of more than ten times that by the year 2018. A substantial amount of investment for blockchain start-ups was generated by ICOs to begin with as traditional VC was difficult to obtain due to regulatory barriers and uncertainty. Exchanges seeking to sell Bitcoin have offered a native token to investors in return for capital.

Many blockchain start-ups chose to raise capital through an ICO to increase the scope of investment from individuals. Many did this through raising and selling Crypto to fund their projects. Blockchain start-ups were able to generate more capital through an ICO than those from traditional methods, but these figures have since changed. Though raising funds through an ICO has shown effectiveness, it can also bring negative effects to a project. Selling Crypto they generated through an ICO to fund their project can depreciate a coin which is not beneficial for that project.

Due to a few exit scams associated with ICOs, projects are becoming reluctant to raise capital this way and are moving back to traditional VC to fundraise. The report from Diar suggests that blockchain and Crypto companies have raised $3.9Bn from VC in the first three quarters of 2018, where 2017 saw the total capital invested just exceed $1Bn. This increase in investment could see the development of more Cryptocurrency projects and start-ups.

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