venture capital

Analysis of Crypto Funds by Inception & Strategy and Estimated AUM

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Autonomous NEXT has kept a running tally on the number of crypto funds within the space, as well as their respective estimated assets under management.  Our findings indicate that over 300 funds currently exist, most of which started in 2017 and 2018, with a variety of strategies including Venture, Trading, Quant & Artificial Intelligence, Fund of Funds, Indexes, Token Baskets, Credit and Ecosystem Funds; with the majority (56%) of total AUM controlled by liquid venture funds. The inception of 61 funds in the first half of 2018 means barriers to entry such as market volatility and significant start-up costs do not pose as significant deterrents to new entrants seeking exposure into the crypto space.

Breakdown of Global Fintech Investment by Region

Autonomous Research has found that global Fintech investments by region have grown from a total of $2.5 billion in 2012 to over $17 billion in 2016. Although there have been notable increases in investments in North America and Europe, Asia has grown most rapidly with investments in the region rising from $0.2 billion to $8.5 billion over the past 4 years.

Analysis of the share of global Fintech deals depicted by region tells us how the quantity of deals made in each region has fluctuated over recent years. North America remains the leader in Fintech deals, but has been experiencing an incrementally lower share of the total deals globally. Europe has maintained steady growth and now represents 28% of all deals, up from 22%. Asia once again has experienced the greatest growth having more than quadrupled the number of deals between 2012 and 2016. The correlation between the global share of the amount of deals and the total investments received in Asia can be explained by the fact that six of the seven largest Fintech companies come from Asia.  Deals and investments from other countries remain fairly constant with only minor fluctuations.

Analysis of Global Fintech Investment

Autonomous Research has estimated the Global Fintech Venture Capital Investment to be $17.7 billion in total capital across 1556 deals in 2016. Compared to 2015, these figures represent an 8.3% increase in total capital received by Fintech start-ups and a decrease of 6.4% in number of investments. Despite this decrease, the CAGR across 2012-2016 stands at 62% for total capital invested and 22% for deal count. As a result, we find that the average capital per deal is growing steadily and new Fintech entrepreneurs are being supported by increased venture financing. 

Analysis of Venture Investment Activity for Digital Wealth Start-ups

Autonomous Research has analysed Venture Investment Activity within the digital wealth sector starting from 2008.  The findings show a surge in venture funding with investments reaching $615 million in 2014 compared to $194 million in 2013. The vast majority of capital was raised in North America, giving rise to digital wealth management start-ups such as Wealthfront and Personal Capital. In 2015, venture funding doubled to $1.3billion resulting from increased investment in Asia and start-ups such as Chunhua Wealth and Wacai.com entered the scene. With considerably smaller venture activity in Europe (and other regions) and investment reductions in Asia in 2016, North America is accounting for the majority of support for digital wealth entrepreneurs.

The second chart analyses the number of companies with seeding rounds targeting digital wealth start-ups across the same time period. We find a surge in companies providing venture funding across all regions from 2014: 56 companies in 2013 to 115 in 2016. Breaking down the companies by region re-affirms that North America offers the majority of venture funding in the wealth tech sector and support of digital wealth start-ups.

Analysis of Blockchain Venture Activity and Bitcoin Relation

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Autonomous Research has analysed the Venture Activity relating to Blockchain and Bitcoin in the period 2011-2016. Our findings show a strong growth in venture funding and deals made, starting in 2013 with $75 million (75 deals). Peak investment in this period occurred in 2016 at $525 million (142 deals) with deals made declining from 195 in 2015. This suggests higher funding per deal and new start-ups are increasingly supported by venture activity, primarily in North America.

Our second chart shows a decline in the share of funding targeted at Bitcoin entrepreneurs with 42% of venture funding not focused on the currency. This is a sharp decrease from 3% in 2014 and implies a shift in interest away from Bitcoin and towards other cryptocurrency and digital ledger technology.