Blockchain accounts for 10% of early-stage startups: report

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Blockchain is one of the fastest-growing technologies in the world of startups, with a new report revealing that 10% of early-stage startups are focused on the technology. Blockchain ranks alongside artificial intelligence (AI), big data, and robotics as the fastest-growing technology trends.

In the past five years, blockchain has experienced rapid adoption, going beyond digital currencies and finance to underpin social media, healthcare, supply chain management, big data, legal services, insurance, and many more sectors.

The latest Global Startup Ecosystem Report reflects this rise in adoption, placing blockchain as one of the sectors to watch, especially among early-stage startups.

The annual report is compiled by policy advisory organization Startup Genome and surveys over 10,000 startup executives globally.

It listed blockchain, AI and big data, fintech, advanced manufacturing and robotics, and agriculture technology (agtech) as the five sectors that have dominated the growth phase of the global startup scene. Collectively, they saw a 107% rise in early-stage funding over the past five years and an average 43% growth in exits. On its own, blockchain recorded 121% growth in early-stage funding.

Blockchain is the second-largest sub-sector in this stage, accounting for 10% of all global startups, alongside fintech and robotics which also boast of a similar share.

The report also picked Seoul as a notable destination for blockchain startups due to its highly skilled blockchain workforce; Belgrade for its efforts to promote blockchain adoption in public and private sectors; Frankfurt for its Blockchain Center which is “an internationally recognized pioneer in the space”; and London for being home to over 400,000 professionals trained in blockchain, AI and quantum computing.

The report shines a light on a trend that has seen investors becoming increasingly attracted to blockchain startups. In the first quarter of 2021, blockchain and digital currency startups attracted $2.6 billion in funding, more than they had attracted in the whole of 2020. In the second quarter, they smashed this record, raising $4.38 billion.

Hardware wallet maker Ledger, embattled lender BlockFi, Circle, Dapper Labs (creators of CryptoKitties and NBA Top Shot), and Blockchain.com are among this year’s highest funded companies. Just this week, New York-based Blockdaemon raised $155 million at a $1.255 billion valuation.

Chris Bendsten, a senior analyst at CB Insights explained the ever-rising funding to CNBC, stating, “Blockchain’s record funding year is being driven by the rising consumer and institutional demand for cryptocurrencies. Despite short-term price volatility, VC firms are still bullish on crypto’s future as a mainstream asset class and blockchain’s potential to make financial markets more efficient, accessible, and secure.”

The Bitcoin SV ecosystem has seen explosive growth in startups, perhaps much more so than any other space. Ayre Group has remained the most prolific investor in the space, leading funding in Centi, Centbee, HandCash, Britevue, TAAL Distributed Information Technologies Inc. (CSE:TAAL | FWB:9SQ1 | OTC: TAALF), TonicPow, UNISOT and more.

Paul Rajchgod, the managing director of private equity at Ayre Ventures noted earlier this year that the firm will continue to “focus on enterprises, big and small, in various sectors. Many of them will develop a deep base of end users (consumers). What they have in common is that their solutions are only possible with Bitcoin SV’s superpowers.”

Aside from Ayre Group, there have been several other venture capital firms that are targeting the transformational startups building on Bitcoin SV. Two Hop Ventures and Unbounded Capital stand out, with investments in Vaionex, BikeFair, HandCash Planaria Corp, Run, Xoken Labs, Tokenized and Pngme.

Zack Resnick, the Unbounded Capital co-founder recently revealed to CoinGeek’s Patrick Thompson that the VC firm is bullish on the future of startups on BSV, stating, “I think long term Unbounded is going to continue focusing on the venture capital way of investing and getting exposure to a blockchain [BSV] that I believe is going to change the world for the positive.”

Further promoting the development of startups on BSV is Satoshi Block Dojo, a London-based incubator focused on startups building on the only massively scalable blockchain. Founder Craig Massey intends to nurture 250 startups in the next five years. The first cohort will begin their program in January 2022 and after three months, they will get to pitch their ideas to investors.

Watch: CoinGeek Zurich panel, Service Providers for the Digital Asset Industry: Evolving for Scale.