The blockchain industry is seeing a significant influx of capital coming from corporate lenders. Many venture capital investors are therefore investing in emerging technology. This is also reflected in the number of blockchain-related startups.
Emerging technology
New data from the ‘Global Startup Ecosystem Report 2021’ (or GSER) shows that blockchain-based companies now account for 10% of startups worldwide. This confirms the trend where emerging technology has become a fast-growing sub-sector, in terms of early stage financing.
The report distinguishes between startups, in growing, mature and shrinking subsectors. It is not surprising that blockchain technology belongs to the first group. The emerging technology is currently generating an average growth rate of 107%. The technology is particularly popular in agricultural technology and new food, advanced manufacturing and robotics, artificial intelligence, big data and fintech. According to the report, blockchain is the second fastest growing subsector in terms of early stage financing.
Silicon Valley leading the way
Currently, Silicon Valley remains the leading source of blockchain funding. Various investors, including Andreessen Horowitz, are regularly in the pool of lenders for blockchain-related companies.
While the GSER focuses primarily on early support for startups, the details of the report are consistent with the already established bullish trend for blockchain among venture capital funds.
Unsurprisingly, blockchain-related companies have already raised approximately $2.6 billion from venture capital investors in the first quarter of this year. This is approximately $300 million more than was raised in all of 2020.
The immense scale of investment funds investing in the technology is also being used as a counter-argument to criticism of the emerging technology’s value proposition. This is because cryptocurrencies and blockchain technology regularly attract negative attention from policymakers. However, these significant investments can be vital in promoting the industry.