Blockchain Startups Raise Record Funding Amount
Blockchain Venture Capital Funding Hits $4.38 Billion
Blockchain startups raised more than $4 billion in venture capital funding during the second quarter, setting a new record. The investment increase comes even as cryptocurrency prices have suffered a steep decline. Since hitting a high of $65,000 in April, the price of bitcoin has plummeted to around $32,000. During the second quarter blockchain companies raised $4.38 billion, which is up 50% from the first quarter.
The huge uptick in funding, despite the bitcoin volatility, underscores the interest investors still have in the growing sector. They are seeking alternative ways to gain exposure to the space including investing in companies focused on the technology that underpins cryptocurrency.
Circle Raises the Most
Of the blockchain startups which secured the most venture funding during the second quarter, payments company Circle outraised the rest. The blockchain and crypto company, which is going public via a $4.5 billion SPAC deal, raised $440 million.
Ledger, which makes crypto wallets, came in second. The startup raised $380 million. Many legacy financial players weren’t interested in Ledger when it raised an earlier round in April, according to CEO Pascal Gauthier. But now he said most major financial institutions are investing or gearing up to get involved in crypto.
Investors are also showing interest in cryptocurrency miners as an alternative way to play the market. Earlier this week miner Core Scientific announced a $4.3 billion SPAC deal.
Fintechs Raise Record Amounts
Beyond blockchain investing, fintech startups raised a record $30.8 billion in the second quarter. That is up 30% from the first quarter and nearly triple the funding raised by fintechs during the same time last year. Europe was a significant driver with investments up 50% year-over-year. Trade Republic, a German stock-trading app operator, raised $900 million while Mollie, a Dutch digital payments company, secured $800 million.
Despite bitcoin’s current bust and the fact that Ether, the world’s second-biggest digital coin, has also fallen over 50% since May, investors are interested in what they consider growing segments of the market. For both the cryptocurrency space and the push to digitize finance, there will surely be speed bumps along the way. Second-quarter funding amounts, however, show that it’s full steam ahead.
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