Sunday, February 28, 2021
  • Setup menu at Appearance » Menus and assign menu to Top Bar Navigation
Advertisement
  • AI Development
    • Artificial Intelligence
    • Machine Learning
    • Neural Networks
    • Learn to Code
  • Data
    • Blockchain
    • Big Data
    • Data Science
  • IT Security
    • Internet Privacy
    • Internet Security
  • Marketing
    • Digital Marketing
    • Marketing Technology
  • Technology Companies
  • Crypto News
No Result
View All Result
NikolaNews
  • AI Development
    • Artificial Intelligence
    • Machine Learning
    • Neural Networks
    • Learn to Code
  • Data
    • Blockchain
    • Big Data
    • Data Science
  • IT Security
    • Internet Privacy
    • Internet Security
  • Marketing
    • Digital Marketing
    • Marketing Technology
  • Technology Companies
  • Crypto News
No Result
View All Result
NikolaNews
No Result
View All Result
Home Blockchain

Why it’s easy for blockchain startups to get initial funding – but harder to cross the series A chasm

August 15, 2019
in Blockchain
Why it’s easy for blockchain startups to get initial funding – but harder to cross the series A chasm
587
SHARES
3.3k
VIEWS
Share on FacebookShare on Twitter

A total of $23.7 billion has been invested into blockchain startups since 2013 – but how is this money being used, and is it affecting these companies’ moves to profitable business models?

A new report from Outlier Ventures (Slideshare) has explored the various funnels of funding and how startups involved in blockchain technologies are competing in the wider ecosystem.

You might also like

Blockchain lags behind other technologies in finance adoption for now, says Broadridge

KPMG, BitGo, and Coin Metrics launch combined offering for public blockchains

Assessing the rise of DeFi – and how data will drive fintech in 2021

According to the Outlier report, three quarters of all venture capital (VC) deals are at the pre-seed, seed and angel stage. The average seed stage round for blockchain companies is at the $1 million mark; yet compared with an average series A at $10m, a disparity occurs. Blockchain startups have either too much money pumped into them without a product fit being established, or if they are established are competing directly against companies with significantly more funding.

Part of this gap can be seen as an after-effect of the ICO. The ICO’s rise came almost directly alongside the explosion in the price of Bitcoin; but alongside that a slew of bad actors and miscreants came along for the ride. The subsequent crash scared them off but the reputation remained.

As a result, more conventional rounds of funding are seen as the norm. Joel John, research analyst at Outlier and author of the report, noted that seed stage funding compensated for a ‘drastic decline’ in ICOs through 2018.

“This may have been a challenge during the early stages of the ecosystem but multiple startups today raise healthy amounts early on in their growth cycle through equity while keeping tokens as a core part of their business models,” John tells The Block. “Startups have grown well and beyond the ICO phase of funding.”

The good news is that many more blockchain companies are attracting initial funding; 2019 will see nine times as many deals in this space compared with 2013. Yet market variables continue to be a factor. Outlier notes that funding is cyclical – as it is in many other sectors – but a correlation remains between the decline of Bitcoin and a shrinking funding pool.

Yet blockchain startups frequently don’t make it to the other side. Mortality rate is high due to ‘challenges stemming from regulations, a lack of traction, and access to investors that fund firms post series B’, as the report puts it.

John notes that while product-market fit is a challenge for all industries, blockchain companies have greater difficulty. “The key challenge blockchain-specific entities face today is with onboarding users to the new paradigm with user experiences that are simple enough,” says John. “A generation of companies may have died simply because they were too early in the adoption cycle.” Changes that have been successful, John adds, are around how wallets are handled, such as in-browser integration via Brave, and onboarding users such as Samsung’s in-mobile key management.

Last month Outlier issued a report which found blockchain startups had raised $822 million across the second quarter of 2019 – lower than previous iterations but with much greater potential, particularly in how enterprises were associating with the technology.

Interested in hearing more in person? Find out more at the Blockchain Expo World Series, Global, Europe and North America.

The post Why it’s easy for blockchain startups to get initial funding – but harder to cross the series A chasm appeared first on The Block.

Credit: Blockchain News

Previous Post

AI And Machine Learning Are Powering Next Generation Media Operations

Next Post

Tilray Stock Sinks as Mike Tyson's Heavyweight Jolt Fails to Ignite Market

Related Posts

Blockchain lags behind other technologies in finance adoption for now, says Broadridge
Blockchain

Blockchain lags behind other technologies in finance adoption for now, says Broadridge

February 26, 2021
KPMG, BitGo, and Coin Metrics launch combined offering for public blockchains
Blockchain

KPMG, BitGo, and Coin Metrics launch combined offering for public blockchains

February 25, 2021
Assessing the rise of DeFi – and how data will drive fintech in 2021
Blockchain

Assessing the rise of DeFi – and how data will drive fintech in 2021

February 24, 2021
Xi’an Jiaotong University establishes blockchain research institute with Future FinTech
Blockchain

Xi’an Jiaotong University establishes blockchain research institute with Future FinTech

February 24, 2021
Tether and Bitfinex reach $18.5m settlement with New York’s Attorney General
Blockchain

Tether and Bitfinex reach $18.5m settlement with New York’s Attorney General

February 24, 2021
Next Post
Tilray Stock Sinks as Mike Tyson's Heavyweight Jolt Fails to Ignite Market

Tilray Stock Sinks as Mike Tyson's Heavyweight Jolt Fails to Ignite Market

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Recommended

Plasticity in Deep Learning: Dynamic Adaptations for AI Self-Driving Cars

Plasticity in Deep Learning: Dynamic Adaptations for AI Self-Driving Cars

January 6, 2019
Microsoft, Google Use Artificial Intelligence to Fight Hackers

Microsoft, Google Use Artificial Intelligence to Fight Hackers

January 6, 2019

Categories

  • Artificial Intelligence
  • Big Data
  • Blockchain
  • Crypto News
  • Data Science
  • Digital Marketing
  • Internet Privacy
  • Internet Security
  • Learn to Code
  • Machine Learning
  • Marketing Technology
  • Neural Networks
  • Technology Companies

Don't miss it

Python vs R! Which one should you choose for data Science
Data Science

Python vs R! Which one should you choose for data Science

February 28, 2021
Can Java be used for machine learning and data science?
Machine Learning

Can Java be used for machine learning and data science?

February 28, 2021
These four new hacking groups are targeting critical infrastructure, warns security company
Internet Security

These four new hacking groups are targeting critical infrastructure, warns security company

February 28, 2021
The Time-Series Ecosystem – Data Science Central
Data Science

The Time-Series Ecosystem – Data Science Central

February 28, 2021
Accurate classification of COVID‐19 patients with different severity via machine learning – Sun – 2021 – Clinical and Translational Medicine
Machine Learning

Accurate classification of COVID‐19 patients with different severity via machine learning – Sun – 2021 – Clinical and Translational Medicine

February 28, 2021
Privacy Commissioner asks for clarity on minister’s powers in Critical Infrastructure Bill
Internet Security

Privacy Commissioner asks for clarity on minister’s powers in Critical Infrastructure Bill

February 28, 2021
NikolaNews

NikolaNews.com is an online News Portal which aims to share news about blockchain, AI, Big Data, and Data Privacy and more!

What’s New Here?

  • Python vs R! Which one should you choose for data Science February 28, 2021
  • Can Java be used for machine learning and data science? February 28, 2021
  • These four new hacking groups are targeting critical infrastructure, warns security company February 28, 2021
  • The Time-Series Ecosystem – Data Science Central February 28, 2021

Subscribe to get more!

© 2019 NikolaNews.com - Global Tech Updates

No Result
View All Result
  • AI Development
    • Artificial Intelligence
    • Machine Learning
    • Neural Networks
    • Learn to Code
  • Data
    • Blockchain
    • Big Data
    • Data Science
  • IT Security
    • Internet Privacy
    • Internet Security
  • Marketing
    • Digital Marketing
    • Marketing Technology
  • Technology Companies
  • Crypto News

© 2019 NikolaNews.com - Global Tech Updates