Bitcoin Venture Capital This Year Already 30% Higher Than Total Investment in 2013

The amount of bitcoin venture capital raised this year is higher than the total investment made in 2013.

The largest fund raises happened in the bitcoin payment processors category, where BitPay raised a record-breaking $30 million in May, following a seed round of $2.7 million last year. Photo: BitPay/Google+

The largest fund raises happened in the bitcoin payment processors category, where BitPay raised a record-breaking $30 million in May, following a seed round of $2.7 million last year. Photo: BitPay/Google+

Bitcoin venture capital this year has already exceeded the amount raised in 2013 by over $27 million.

In 2014, the bitcoin businesses received investments of $113.2 million what is 29% higher than the overall amount in 2013. In comparison, the amount of venture capital raised by bitcoin startups totaled $2.1 million in 2012.

The largest investor this year is 500 Startups, which has acquired shares in five companies. Such firms as the Bitcoin Opportunity Fund, Tim Draper and Crypto Currency Partners also made their investments this year. Each of these companies made two investments.

Venture funds were more interested in making investments in exchange businesses. Thus, the total investments in exchanges were estimated at $21 million. Other popular segment is financial services and payment processors.

The category of payment processors raised the largest amount of funding, which totaled $31 million. The sectors of mining, exchanges and wallet services were second on the fundraising table and raised $21 each. By the way, the mining category made just one investment in BitFury, valued at $20 million.

The payment processor BitPay raised the largest funding of $30 million in May compared to the last year sum of $2.7 million.

The investors included Index Ventures, Founders Fund and involved such marquee names as Sir Richard Branson and Jerry Yang, a Yahoo co-founder. BitPay executive chairman Tony Gallippi noted that the money will be spent on the business development.

The bitcoin startups that were second on this year’s fundraising table, operate on the opposite sites of the bitcoin economy.

With a funding of $20 million, BitFury makes ASIC miners that are the critical elements of the bitcoin infrastructure. Meantime, Xapo, with the same amount of funding, is working on bringing the digital currency to debit cards and ensuring a high level of wallet security.

The five startups that raised the largest funding this year amounted to $97 million, which equals to 84% of the total venture capital investment.

Although bitcoin is a world decentralized virtual currency, the majority of the startups, operating in the bitcoin ecosystem, are based in the United States.

About $172 million of the total venture funding for bitcoin firms was invested in the companies that are located in the US. The amount comprises 75% share of the funding pie. This tendency did not change in 2014 as the US companies raised $78 million or 68% of all venture capital funding.

The data shows that the amount of investments made in the bitcoin startups is currently growing. According to the US National Venture Capital Association, the overall amount of venture capital raised for financial companies in 2013 accounted for $566 million. It is obvious that bitcoin will continue to grow.

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