Five Strategic Firms in the Crypto-Landscape
There’s been a lot of venture capital flying around the cryptocurrency and blockchain environment this year. Some investment firms are legacy financial institutions who have their sights set on this emerging technology. However, some firms are purely dedicated to the blossoming fintech industry and are snatching up every digital currency and distributed ledger startup they […]
There’s been a lot of venture capital flying around the cryptocurrency and blockchain environment this year. Some investment firms are legacy financial institutions who have their sights set on this emerging technology. However, some firms are purely dedicated to the blossoming fintech industry and are snatching up every digital currency and distributed ledger startup they can finance under their wings.
5 Venture Capital Firms That Help Bitcoin & Blockchain Startups Blossom
This early-stage venture capital firm founded by Tim Draper has an astounding 87 Investments in 74 technology-based companies. Some of the companies included in the Draper Associates portfolio are Fluent, Bitwage, EdgeMail, HashRabbit Inc., Skype and Indiegogo. The firm stimulates startups and entrepreneurs to the next level of the technology industry. Draper Associates says that it helps firms create revolutionary concepts that will innovate and disrupt with new media, gaming, SaaS, cloud, finance, IOT, and mobile.
Founder Tim Draper is a strong believer in cryptocurrency and blockchain technology. In fact, Draper predicts that the price of Bitcoin will skyrocket and reach $10,000 USD by 2018. Draper has also bought 32,000 bitcoins from the U.S. Marshals auction of the Silk Road seizure. Additionally, when the bitcoin price had fallen to roughly $200 in January 2015, Draper bet $400,000 in an email that the currency would bounce back from the low $200s. And the cryptocurrency did just that. There has been no word on whether the wager was actually accepted.
This venture capital firm “builds and supports bitcoin and blockchain companies by leveraging insights, network, and access to capital,” has invested quite a bit into the crypto-landscape.
Created by former SecondMarket founder Barry Silbert in 2015, the Digital Currency Group (DCG) has a significant portfolio of blockchain and Bitcoin startups. The companies DGC has invested in include Bitwala, Fluent, Elliptic, Rootstock, Purse, Gem, Abra, BitPagos, and Shapeshift.
Barry Silbert is also a firm proponent of these emerging technologies. DCG has been making waves across the industry, recently receiving funding from Western Union. The firm has also added former US Treasury Secretary Larry Summers and Bitcoin developer Gavin Andresen to its board of advisors. Additionally, DCG owns the media publication CoinDesk as one of its subsidiaries. Silbert has also created the Bitcoin Investment Trust (BIT), which is considered an “open-ended trust” sponsored by Grayscale Investments. Silbert has said in the past that he believes at some point the value of Bitcoin will rise exponentially after the start of a “flywheel” effect.
Another large venture capital firm that helps finance and promote budding startups is Blockchain Capital.
Founded on October 1, 2013 by Brock Pierce, Bart Stephens, and Brad Stephens, the firm wants to help the blockchain business sector grow. Blockchain Capital has roughly 48 investments in 36 companies that encompass these emerging technologies. Companies found under the Blockchain Capital hood include Blockstream, Gem, Stem, Chain, Ripple, and Bitpesa.
Blockchain Capital believes distributed ledger technology and cryptocurrency is “a novel financial technology that holds the promise to disrupt legacy parts of financial services and create new markets.” The three co-founders have significant backgrounds in financial technology, internet security, cryptography and Wall Street. Pierce is the Chairperson of the Bitcoin Foundation and is very vocal when it comes to bolstering Bitcoin-related protocols and businesses.
Founded by Dan Morehead, the San Francisco-based investment firm Pantera Capital focuses on financial tech services, Bitcoin, IoT, and blockchain protocols. The company is a dedicated proponent of Bitcoin and states, “we believe Bitcoin has the potential to transform the way we use money, and that it will do for payments what the Internet has done for communications and commerce.”
The firm has invested in Chronicled, BitPagos, 21 Inc., Circle Financial, and Xapo, among many other startups. The company was founded in 2003, but Morehead has since shifted the company’s direction on digital currency and blockchain solutions.
Last, but not least, we have the Silicon Valley giant, Andresen Horowitz. Launched in 2009, the venture capital firm boasts a $2.5 billion USD portfolio.
Founded by Marc Andreessen and Ben Horowitz, the firm invests in a lot of businesses associated with technology, more recently turning its focus on Bitcoin and blockchain-related investments. Andreessen Horowitz has a whopping 443 investments in 284 companies that incorporate startups such as GitHub, Blockspring, OpenBazaar, 21 Inc., Tradeblock and Coinbase.
Marc Andreessen is also a very vocal person when it comes to technology. A firm believer in the Internet of Things revolution, Andreessen tells a TelegraphUK reporter, “The end state is fairly obvious – every light, every doorknob will be connected to the internet. Just like with the web itself, there will be thousands of use cases — energy efficiency, food safety, major problems that aren’t as obvious as smartwatches and wearables.”
Some Will Succeed and Some Will Fail
Blockchain companies and Bitcoin startups are popping up everywhere, and these venture capital moguls all want a piece of the action. There’s a lot of money to be made and, obviously, these firms believe they will get a return on their investments with these budding companies. However, not all of them will succeed. Many companies have already fallen to the wayside in this industry.
What do you think about these venture capital firms? Let us know in the comments below!
Images courtesy of Blockchain Capital, Draper Associates, DGC, Pantera Capital, and Andreessen Horowitz websites
** Disclosure: Bitcoin.com is not associated with any of the above-mentioned firms.