Cryptocurrency venture capital firm Digital Currency Group has posted details on the performance of its investments in cryptocurrency and blockchain companies, in one of the most comprehensive industry financial datasets published to date.
Spanning almost 130 investments, the company reported summaries of the performance of its positions since 2016, providing a basis for comparison of the health of the industry from then until now.
Notably, while their portfolio reported growth in 2016 and 2017, 2018 was described as “a bloodbath.”
“In 2017—which was a period of deranged froth in the public markets for tokens — valuations skyrocketed. The average seed-stage valuation jumped from $10.68mm in 2016 to $15.51mm in 2017 (+45%),” according to the firm. “But things reversed in 2018. While last year was a bloodbath for publicly traded tokens, valuations in private seed-stage rounds we joined fell modestly, to an average of $12.93mm (-17%).”
In a post published on Medium, Digital Currency Group said the data was published to give a broader perspective on the blockchain and cryptocurrency market.
It noted, “As the most active investor in the blockchain space, we’ve seen a lot of deals over the past few years, and we track deal information closely. We’ve decided to publish some of this data, sharing key terms such as average round size and valuation for deals we participated in between 2016 and 2018. We hope these stats will be helpful to entrepreneurs and investors, and at least informative, if not entertaining, to all.”
In the post, a spokesperson for Digital Currency Group said that while the raw data is valuable, its conclusions are only intuitions.
“In this brief report, we shared data on the DCG portfolio and noted several key blockchain deal trends over the last three years. As with all attempts to explain data, it’s easy to look at the charts and explain them in a way that makes sense. But just because something makes intuitive sense doesn’t mean the logic holds full explanatory power. We include this caveat to say the above intuitions are just that — intuitions,” according to the firm.
The group stopped short of discussing plans for the year to come, despite some commentators suggesting markets could be preparing to emerge from the bear market that has seen crypto prices collapse across the board.
The hope for Digital Currency Group will be that the investment outlook for cryptocurrency businesses improves soon to recover lost ground.
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