2021 has been an interesting year in the crypto world. Bitcoin (BTC) has reached all-time highs in several different metrics, including adoption, media coverage, and price action. It has been exciting to see all the coverage and attention for all things crypto, including interest in non-fungible tokens (NFTs), decentralized finance (DeFi) and even large publicly traded companies. like MicroStrategy holding significant amounts of BTC on its balance sheet. All of this is the public face of the crypto industry.
However, this does not happen by itself. There are teams of people and projects working every day to improve existing applications for crypto and trying to be the next DeFi phenomenon, NFT craze, or solution to a legacy problem that only blockchain can solve. effectively.
Drawing from the Cointelegraph Research Terminal’s database of venture capital deals, mergers and acquisitions (M&A) activity, investors and crypto companies, this 12-page report presents insights into investment activities in 2021. The report provides significant information on the trends of recent years. years and what the VCs focused on in 2021.
The next block
The next steps in the blockchain revolution are being built behind the scenes, but it takes time, and one important aspect that can be overlooked is capital investment. Venture capital (VC) can come from many different sources such as high net worth individuals (HNWIs), family offices, institutions, funds and even decentralized autonomous organizations (DAOs).
Knowing what is being built, who is behind it, and the network that is helping build a project can help interested parties get a head start on the future of the blockchain industry, instead of reading news articles online about the results afterwards.
Download the full report here, with charts and infographics.
The research terminal Cointelegraph, in collaboration with Keychain Ventures, will publish quarterly reports on behind-the-scenes events on VC capital inflows into the blockchain industry. Prior to releasing the Q1 2022 VC Report, Cointelegraph Research will release a 12-page report that highlights VC activity in 2021.
Venture capital interest in crypto and blockchain is on the rise
2021 has seen an unprecedented increase in active transactions and total capital inflows. In 2020, there were 838 transactions with a total capital of $4.9 billion. The number of deals jumped in 2021 to 1,349 deals and just under $30.5 billion in capital investments.
The global impact of COVID-19 has accelerated interest in digital assets, and mainstream companies such as Visa, Mastercard, PayPal and Nike have all invested heavily in different sectors of the blockchain space including DeFi, infrastructure and NFTs.
The ten most active venture capital funds accounted for around 65% of all individual deal activity in 2021. Nine out of ten preferred DeFi for investment in 2021, with the exception of Animoca Brands, which went to against the norm and invested heavily in NFTs.
The second most invested sector was NFTs, and third place was split between Web3 and Infrastructure. CeFi, interestingly, was the least invested sector. Only Alameda Research and Coinbase Ventures have invested in the double digit percentages of their overall business.
Considering all of the individual investments in 2021, the majority of venture capital investment rounds have taken place in pre-seed and seed rounds. However, these cycles did not get the greatest capital funding compared to the others. Series B, for example, only had 61 rounds but grossed $6.8 billion. Post-Series B expansion rounds, which include debt financing, strategic partnerships and cash diversification, have had more than 200 rounds and nearly $10.27 billion in investments.
Mostly acquisitions in the crypto world 2021 M&A
There have been significant deals in the M&A department in 2021. The major focus on acquisitions rather than mergers at the business cycle stage of the blockchain industry makes sense, as it has yet to reached a real level of maturity.
While almost all of the agreements on this list were of great importance, several stand out for their greater import in the blockchain industry and the direction of the markets in general. These include Mastercard’s acquisition of CipherTrace, PayPal’s acquisition of Curv, Visa’s acquisition of Tink, and Nike’s purchase of RTFKT Studios.
These strategic purchases have significant significance for Mastercard, PayPal and Visa’s actions will expand each company’s involvement in DeFi and Infrastructure, such as fiat on- and off-ramps, payment gateways and systems that operate the unique technological benefits of blockchain like three-ledger accounting. Nike’s acquisition of RTFKT Studios shows a willingness to embrace the growing market interest in NFTs, which can have a big impact on the sports world.
Quarterly Venture Capital Reports from Cointelegraph Research Terminal and Keychain Ventures
The report is based on the extensive database of Cointelegraph Research Terminals as well as analysis by Michael Tabone, an economist at Cointelegraph Research. Michael has extensive experience in economics, business, finance, cryptocurrency, blockchain technology and working with emerging technologies. In addition to working for Cointelegraph Research, Michael holds a Ph.D. candidate working on his thesis, which is focused on the theory and application of DAOs.
Keychain Ventures is a crypto investment company that is committed to investing different funds in the blockchain space. Keychain Ventures, along with Cointelegraph Research, will feature quarterly interviews with venture capitalists as well as crypto/blockchain projects that have recently gone through a funding round. These interviews will open up different points of view on the investment practices of all parties.
This article is for informational purposes only and does not represent investment advice, investment analysis or an invitation to buy or sell financial instruments. Specifically, the document is not a substitute for individual investment or other advice.