Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
Despite a growing interest by global organizations and government institutions for the blockchain technology, the industry saw a drop in new funds raised. Ripple managed to steal the show with over $200 million raised in Series C funding.
Ripple Labs, the San Francisco-based blockchain startup, secured the highest funding in comparison to other peer blockchain companies in 2019. The latest report from CB Insights shows that Ripple raised $200 million in the Series C round last year.
Among the companies that follow Ripple on the list are Figure Technologies, Digital Asset and PeerNova. However, the gap between the first and second positions is significant. However, even Ripple’s $200 million is a very small amount in comparison with $400 million and $321 million of Bitmain and Coinbase (respectively) in 2018.
Some of the popular and leading investors in Ripple included Tetragon Financial Group, SBI Group, and Routee 66 Ventures. At the time of the Series C funding, Ripple’s overall market valuations stood over $10 billion.
Despite not being a good year for XRP and its investors, Ripple has managed to sway the investors to its doors. Last year, the XRP price was falling. And the coin was the only among the top ten cryptocurrencies to give a negative return in the market. However, apart from XRP, Ripple has other blockchain-based payment solutions in the market.
Its xCurrent payment solution facilitates instant cross-border payments by leveraging the power of blockchain. Some of the big banking and money-transfer companies like Banco Santander, Western Union, MoneyGram, etc. are using Ripple’s payment solutions.
Ripple said that it will be using the fresh influx of funding for opening more global offices, hiring new talent, and improving the balance sheet flexibility. At the ongoing World Economic Forum 2020, the U.S. Treasury Secretary Steven Mnuchin said that the government will support companies working on reducing cross-border payment costs.
Overall Blockchain Investments Decline in 2019
In the list of top blockchain companies raising funds in 2019, next to Ripple was Figure Technologies. However, Figure Technologies could manage only $103 million fundraisings i.e. half that of Ripple raised. Figure said that it will use these funds for its blockchain-based platform Provenance which helps to give equity loans to its users in minutes.
The next big blockchain companies to raise funds were Digital Asset and PeerNova, raising $35 million and $31 million respectively. Digital Asset will use the raised funds for improving asset settlement processes using its Digital Asset Modeling Language (DAML). While PeerNova intends to use these funds for the expansion of its technology platform.
2019 was the year when global organizations and government institutions acknowledged the power of blockchain technology and started participating in the blockchain industry. Thus, it is surprising to see fewer companies willing to make investments in blockchain projects.
In 2019, the total equity funding in blockchain companies dropped by 30% in comparison to its previous year. The authors of the report state that the reason for this drop in funding is because the startups are still trying to figure out the product-market fit.
In Q4 2019, blockchain companies raised a total of $785 million seeing a 36% drop from Q4 2018.