It is important to see how the blockchain is used and what features are mainly exploited by startups that work in the field to understand what prospects open thanks to the work of technology companies.
Smart Contract and decentralised application (DApp) are the two main “engines” exploited by 52% of startups and able to collect 44% of funding; 23 percent of startups focus on the use of cryptocurrencies and 25 percent of the funds are concentrated on this functionality; notarization is used by 4% of new businesses and represents 2% of funding.
According to the
report conducted by Blockchain & Distributed Ledger Observatory, the 605 new companies mapped mainly focused on the Data & Document Management processes (20% as the number of startups, but 15% as the share of loans) and Software Development (19% as the number of companies and 15% as the flow of financial resources).
Great attention to Payment issues with 15 percent of startups and as loans, followed by Exchange & Trading, Capital Markets, Wallet with 12%, 11% and 5 percent respectively at the business level and 14%, 11% and 7% in terms of funding. Of note, 5 percent of startups working on the issues of traceability, which however receive 1% of funding.
In the analysis of the process financing, it is noted that investors reward the issues of Lending/Crowdfunding where 21 startups that receive on average $ 19 million are placed, Software Development follows with 115 companies that receive on average $ 17.7 million and the Wallet world populated by 33 startups with an average investment of $17.6 million.
Data and Document Management which, as we have seen, represents the “process” on which the attention of startups with 118 realities is most concentrated, instead sees an average investment of $10.2 Mln.
What Are the Funding Channels for Blockchain Startups?
It was said at the beginning that the blockchain expresses an innovation potential capable of embracing many different areas among which, not least and certainly not negligible, is the possibility of implementing new methods of financing.
Not only that, the very forms through which a new company collects resources for the development of its ideas are the subject of innovation. This is the case, for example, of the Initial Coin Offerings (ICOs) which played a major role in the launch of new startups in 2017.
The report further focuses in particular on startups that have received only Venture Capital (VC) funding and startups that have received only ICO funding.
The VC believes with conviction in the prospects of Software Development which alone collects 30% of the investments, a share that drops to 17 percent in the case of financing through ICO; Data & Document Management are at the same level of interest between VC and ICO (15% and 16%); Capital Markets solutions reach 13% in venture capital investments, while they are 9% of ICOs; Payment is 13% of VC and 11 percent of the initial coin offering.
The most important share of ICO investments is represented by projects on Exchange & Trading which occupy 20% of these portfolios, while they stop at 11 percent in the case of Venture Capital “pockets”.