2019 Global Blockchain Financing Report

In 2019, there were a total of 653 blockchain-related financing events worldwide, with a total financing amount of nearly 4.7 billion USD (, approximately 32.9 billion RMB ). In addition, there were 35 publicly disclosed merger and acquisition events, with a total amount exceeding 3 billion USD. It should be noted that this report only accounts for publicly disclosed financing information and does not include financing forms such as IPO, IEO, ICO, STO, etc.

Annual Financing Overview

In 2019, there were 653 financing events in the global blockchain industry, with the frequency of financing generally showing a fluctuating upward trend. From February to August, the investment market revived, with the number of investments and financing rising in a stepped manner, and financing activities significantly increased in July and August, totaling 146 events over the two months. In September, the investment and financing market cooled down, with the number of events dropping by nearly 20, a month-on-month decrease of nearly 25%. October welcomed the peak of capital activity for the year, with 84 events that month, close to 13% of the annual total. However, the investment and financing situation in the fourth quarter was the most unstable, as the peak in October could not be maintained, dropping to only 39 events by December, below the monthly average of 54.4 events.

In the second half of 2019, market enthusiasm significantly increased, with 135 more financing events compared to the first half, a month-on-month increase of over 50%. It is worth noting that the investment sentiment in the blockchain market is closely related to Bitcoin trends and the regulatory policies of various countries. The active financing period aligns relatively well with Bitcoin's rise, though it is slightly lagging; a large influx of capital occurred in July and August, greatly boosting investor confidence, which continued until October; in the second half of the year, global regulations on the cryptocurrency sector tightened, especially as the Libra project faced setbacks, causing investors to be more rational and cautious in the fourth quarter.

In terms of amount, global blockchain financing reached a total of $4.7 billion in 2019, with an average of $477 million per month. The highest financing amount was in October, at $977 million, accounting for 21% of the annual total, with an average financing of $11.629 million across 84 projects that month. In February, June, July, October, and December, the monthly financing exceeded $400 million. The lowest point of the year occurred in May, with only $179 million, which is less than half of the average. Overall, the total financing amount did not increase due to the increase in events; aside from peak months, the monthly amounts remained stable with a slight decline, indicating a decrease in the amount of individual investments.

Analysis of Financing Characteristics

Financing Scale

From the distribution of financing amount levels, excluding those with undisclosed specific amounts, there are 27 projects in the hundreds of thousands of dollars range, 64 projects in the million and ten million dollar range, and the least number of projects in the hundred million dollar financing range. Overall, the financing scale of enterprises in the industry is relatively small.

Among the 10 projects with over 100 million dollars, except for ZhongAn Technology, which received a strategic investment of 1.961 billion RMB, the remaining 9 are related to digital assets or financial scenario applications. Among them, exchanges and financial payment services are more representative categories. In February, the exchange Kraken received a 100 million dollar investment, and in October, a certain exchange received an investment of 50,000 bitcoins. In terms of payments, the Indian payment company PhonePe successively received investments of 101 million dollars and 4.05 billion rupees. Payment companies Rapyd and Ripple also received investments of 100 million dollars and 200 million dollars, respectively. It is worth noting that in 2019, substantial capital favored the financial payment sector, accounting for one-third of the 9 financing rounds over 100 million dollars.

Financing Stage

Except for unknown financing stages and strategic financing, seed/angel rounds ranked first with 308 cases, accounting for 26%. A-round financing had 102 cases, accounting for 15.6%, while financing above B-round had only 61 cases, less than 10%.

From the distribution of financing stages, the development phase of the industry can be observed. The total number of financings increased throughout the year, with rounds concentrated in the primary stage and showing little variation, and the types trending towards diverse application implementations, indicating that it is currently in an early application rising phase, with development still not saturated. In addition, "financing is shifting from early to mid-late stages" reflects that the industry is gradually expanding in scale and moving towards maturity. In the first quarter, financing is concentrated in the primary stage, with significant gaps in Series B and above, but the situation is changing continuously. By the fourth quarter, financing is developing discretely towards the mid-late stage, with a substantial decrease in the number of rounds and a trend towards a more balanced distribution, reducing the occurrence of gaps.

Financing Field

Based on changes in industry development, the expansion of the entire industry has led to the development of a large number of new ecosystems and scenarios. It can be divided into five major categories: underlying platforms & infrastructure, digital assets, financial application scenarios, physical application scenarios, and industry services, with more than 60 secondary classifications.

From the perspective of primary classification, excluding unknown items, the digital asset portion accounts for 33% (214 occurrences ). Physical application scenarios rank second with 147 occurrences. The cumulative total of financial and physical application scenarios is 219 occurrences, which is comparable to digital assets, and this is related to the entry of large institutions and significant capital in recent years.

Exchanges accounted for 129 events, representing 60% of digital asset financing and 20% of the total, becoming the category with the highest frequency of financing. In 2019, exchanges raised approximately $2.22 billion, accounting for 40% of the total. Additionally, solutions/technical support in underlying technologies, public chains; information services in industry services; gaming in physical applications; and payments in financial applications all accounted for more than 5% in financing frequency.

The divisions between various segments within the digital asset and underlying platform sectors are quite distinct, having developed over a longer period and being more mature, with competition and elimination within the industry already underway. In 2019, the investment enthusiasm shifted from digital assets to industry applications, which is related to the stage of industry development on one hand, and on the other hand, the tightening of digital asset regulations in various countries, especially in China where multiple heavy-handed measures targeting cryptocurrency trading were implemented after October, may lead to a cooling in exchange financing.

Regional Distribution

Global Distribution

North America, Asia, and Europe are the most active investment regions. The United States dominates, with 181 financing cases in 2019, accounting for 27.7%, covering all industries. 11 countries in Asia and Europe received investments, with a more dispersed distribution, and the UK leads Europe with 22 cases.

In Asia, China has ( incidents including Hong Kong, Macau, and Taiwan )191, Japan has 3 incidents, South Korea has 9 incidents, India has 19 incidents, and Singapore has 47 incidents. It is worth noting that markets such as India, Vietnam, and Brazil are accelerating the experimental application of Blockchain industry due to demographic dividends and loose policies, aiming to achieve a leapfrog development.

Distribution within China

Due to the prohibition of ICOs and other digital transactions, domestic investment tends to focus on underlying technologies and industry applications. Especially after October 2019, government-guided applications have flourished everywhere.

The Chinese Blockchain industry is mainly concentrated in four major industrial clusters: the Bohai Rim, the Yangtze River Delta, the Guangdong-Hong Kong-Macao Greater Bay Area, and the Xiang-Qian-Chong area. In 2019, there were 191 domestic financing cases, amounting to 1.152 billion USD. The Bohai Rim region, centered around Beijing, is the most favored, with 96 cases throughout the year, of which 93 were in Beijing, attracting over 370 million USD in investment, leading the country.

Beijing performs the best, with a rich variety of financing types, covering everything from underlying technology to application implementation, with the highest total amount and many large financings. The Guangdong-Hong Kong-Macao Greater Bay Area is second, with a cumulative 30 investments, flowing over 100 million dollars. The Hong Kong Securities and Futures Commission has released multiple regulatory measures, and Shenzhen has been designated as a "testing ground" for digital currency. The Yangtze River Delta region is relatively weak, with a total of 31 cases in Shanghai, Zhejiang, Jiangsu, and Anhui, including 16 in Shanghai, 13 in Zhejiang, 2 in Jiangsu, and 0 in Anhui. In addition, Hainan has 10 financing events.