Blockchain, CryptocurrenciesJune 1, 2018

Blockchain Technology Seeing New Paradigm With Dramatic Shift to ICOs

By Venture Scanner

With all the ICO buzz in the Blockchain sector, we dove into our Blockchain Technology report and research platform to examine how significant this new financing model has been. It comes as no surprise that we can conclude that the Blockchain Technology sector is experiencing a new financing paradigm.

This conclusion comes from two takeaways:

Funding amounts shifted dramatically to ICOs
Funding counts saw a drop in early-stage events with the emergence of ICOs

We’ll explain these takeaways with some graphics that show Blockchain Technology funding activity by round.

To help set the stage, the graphic below illustrates Blockchain Technology funding amounts over time. As you can see, the sector’s overall funding skyrocketed in the past few years. Additionally, Q1 2018 is the best Q1 on record.

Blockchain Technology Funding Amounts Shifted Dramatically to ICOs

We’ll start off by examining the annual Blockchain Technology funding amounts by round.

As shown in the graph, the funding amounts in most rounds rose gradually from 2012 to 2015. From 2015 onwards, funding amounts shifted dramatically to ICO events. In fact, the funding amount in ICO events amounted to almost $2B in 2017.

We’ll now look at the Blockchain Technology funding amount by round as a percentage of the total, which shows changes independent of the total size.

The above graph supports our previous observation that funding amounts saw substantial shifts to ICOs from 2015 to 2017. Initially, early-stage events accounted for almost all of the sector’s funding amounts from 2012 to 2015. In 2016, ICOs emerged on the horizon and took over 27% of the sector’s funding amounts. By 2017, there was a complete shift, with ICO events dominating the sector’s funding amounts at 73%.

So we see that the funding amount graphs indicate a drastic shift to ICO events from 2015 to 2017. Would the funding event count graphs show the same trend? Let’s examine them in the next section to find out.

Blockchain Technology Funding Counts Saw Emergence of ICOs

Let’s now look at the annual Blockchain Technology funding event counts. The below graph shows the Blockchain Technology funding counts by round as a percentage.

This graph confirms our previous observations. Specifically, ICOs represented 3% of the sector’s funding counts in 2016 and grew to 35% in 2017. As a result, the funding counts in most early-stage rounds decreased by 2017.