Blockchain in Finance: ICO Market Research, Private Funding Activity, and MnA

A sector ready for bounce back…
Blockchain has established itself as a challenger in the Finance sector. Many teams both start ups as well as corporate sponsored are trying to lay ground rules and define the course of evolution of this sector.

Despite technological challenges and regulatory hurdles, teams are innovating faster to shape up the new rules of engagement in the ecosystem. Initial results are evident in terms of intermediaries in cash transfers, capital and risk.

InWara has studied trends among the companies with blockchain technology with or without an ICO. The study provides insights based on the analysis of ICOs with participation in tokens from Institutional investors, Capital raised in private rounds and data based on information published by companies raising funds through an ICO.

This study covers

  • Finance sector ICO Landscape
  • Finance ICOs- Market Trend Analysis
  • Private Funding Activity
  • Mergers and Acquisitions
  • Miscellaneous Stats

Finance Sector ICO Landscape

Finance sector dominates with over 957 ICOs till date, of these not all were successful in raising capital to reach their respective hard caps. Within the sector, Financial Services have seen the largest number of successful ICOs at 137.

Source: InWara’s Finance sector report

Financial Services contributed to over 40% of total ICOs in Finance Sector which in turn accounted for over 40% of the overall ICOs.

Capital raising takes a breather with the threshold average Hardcaps witnessing a marginal decline

Source: InWara’s Finance sector report

Decoding Tokenomics in Finance Sector

The Finance sector raised $2.4 billion in 2017 and $1.9 billion YTD 2018. The mean funds raised remained relatively stable at $40 million for 2017 & YTD 2018.

Interestingly, the difference between Hardcap and Softcap has decreased during 2018 vs 2017 because of a decrease in Hardcap and an increase in Softcap, indicating a maturing market with better understanding of capital requirements and deployment. Key players with successful ICOs are:

Dragon Coin (DRG)

Dragon is a blockchain-based company that provides the payment solution in the entertainment industry in a more secure, transparent and cost-effective way.

PumaPay (PMA)

PumaPay is a free, open-source, blockchain based payment protocol featuring the unique architecture of Pull Payment.

Liquid (QASH)

Quoine’s Liquid platform is a single globally-sourced trading platform (world book) with an associated suite of services (Prime brokerage). Combined, these produce the highest level of liquidity in the world — allowing any individual to access the opportunities and wealth the new crypto economy offers.

Returns on Investment: Insurance ICOs in dangerous waters

Source: InWara’s Finance sector report

Despite the volatility in the broader market, Investments, Cryptocurrency & Financial Services based ICOs have managed to post gains for Q3, 2018. Unfortunately, Insurance ICOs have seen a double dip downward trend.

Finance ICOs- Market Trend Analysis

This section covers news and events affecting the market:

  • Fidelity Investments case
  • Intercontinental Exchange’s Bakkt’s crypto institutionalization
  • Google’s take on cryptocurrency

Private Funding Activity

Private investors have consistently backed the Finance Sector with the number of investment rounds up by 65% during 2018. The total capital raised in the private investment round has crossed $1 billion in Q3 2018. Overall, Private funding has seen significant growth of over 150% during YTD 2018 as compared to 2017.

Source: InWara’s Finance sector report

Among the Private investors, Venture Capital involvement in pre-sale and private sale has been increasing.

Top 10 Active Venture Capital investors in the Finance Sector

Source: InWara’s Finance sector report

Focused Blockchain funds have been shopping in 2018 with large number of investments made by Digital Currency Group & Blockchain Capital.

Mergers and Acquisitions: Finance sector acquisitions up by 61 % in 2018

Source: InWara’s Finance sector report

Analysis of blockbuster deals like Coinbase acquiring is covered in this section.

More details in the sector report!

Miscellaneous Stats

This section covers the number of active ICOs, failed ICOs and concluded ICOs. The section also provides a detailed analysis of success and failure rates. It also does an analysis of the founder — age, backgrounds, experience, etc.

Source: InWara’s Finance sector report

Over 80% of ICOs are led by management team under the age group of 35–40 years across all sectors but the finance sector seem to have been led by relatively younger management.

To sum it up

Future seems optimistic despite the slow down in 2018. All it really takes is a step back from the charts and an education on the underlying fundamentals to realize that digital assets have been beaten without cause. However, a bounce back is imminent.

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