A KPMG study finds that fintech companies’ investment in blockchain technology in 2018 has already surpassed the entirety of 2017.
Capital growth
‘The Pulse of Fintech 2018‘ biannual study from one of the Big Four auditing and consultancy firms took a global look at the growth of fintech investments, which in the first six months of 2018 has broken past 2017 in spectacular fashion.
The study affirms that blockchain is “moving beyond experimentation”, noting that a majority of Q1 and Q2 investors in 2018 gravitated more toward established companies and organizations moving into “additional rounds of funding”. This is contrasting to 2017 which saw significant amounts of investment in startups, especially through initial coin offerings.
Venture capitalist blockchain investment so far this year has reached USD 858 million, more than 2017’s USD 631 million. These figures are bolstered by two enormous funding rounds: Circle, which raised USD 110 million and Ledger cryptocurrency wallet, which recently raised USD 77 million.
Safwan Zaheer, Financial Services Digital & US Fintech lead for KPMG said, “There’s more VC flow available than opportunities to invest – a sign of tremendous growth in the space… Investments in blockchain related firms already doubled in the first half of 2018 compared to 2017. Blockchain has the potential to transform banking services. If banking systems were to be rewritten today they would be based on blockchain.”
The study acknowledges the versatile list of applications for blockchain technologies, which is a contributor to its growing success, especially within the financial sector. KPMG cites banking and insurance as two of the primary uses of the technology but also explains that blockchain can “enhance processes for any number of US and global businesses.”
Initial coin offerings
With regards to ICOs, the modern crowdfunding method has also seen a sharp rise, outpacing that of 2017. A similar June report released by another of the Big Four, PwC, found that a total of 537 ICOs in the first five months of 2018 have raised more than every ICO prior to 2018, with a total volume of USD 13.7 billion.
Again, a part-cause for the ICO figure exploding in 2018 is down to the EOS ICO which lasted for a whole year, raking in a record USD 4 billion, beating the previous record of Telegram’s controversial USD 1.7 billion ICO.
The Big Four have been looking at the growing industry with a piqued curiosity; in April 2018, it was reported that the firms were receiving daily enquiries into ICOs and cryptocurrencies from clients.
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