According to industry trend monitor CB Insights, bitcoin startups raised a record $4 billion in venture capital in the second quarter of 2021, among a bumper crop of $30.8 billion in fintech acquisitions overall.
Large rounds, like those from stablecoin startup Circle, which raised a then-record $440 million in May, were cited in the study. (A $900 million Series B for Sam Bankman-FTX Fried’s exchange broke the record for largest crypto fundraising round this week.)
CB Insights also mentioned hardware wallet company Ledger’s $380 million round in June; Paxos’ $300 million round in April (which, like Circle, also functions as the steward of stablecoins); Block. one’s $300 million round in May for its Bullish exchange; and Bitso’s $250 million hauls in May.
While the price of bitcoin and other cryptocurrencies has been stable in recent weeks, the amount of crypto raises appears to be expanding in Q3, with FTX leading the drive.
“Q2’21 was the greatest fundraising quarter on record,” according to the study, which also stated:
“Global VC-backed fintech startups raised a record $30.8 billion in 657 deals, surpassing the previous quarter’s fundraising record by 30%. This impressive capital rise was accompanied by a 2 percent quarter-over-quarter (QoQ) deal growth and a 29 percent year-over-year (YoY) increase.”
Sectors to keep an eye on
According to the paper, cryptocurrency has ushered in a new era of banking compliance. Another popular sector in terms of fundraising is blockchain analytics businesses, which track transactions and aid regulators and law enforcement.
In June, Chainalysis raised $100 million and CipherTrace raised $27 million, according to the article.
In addition to the Ledger and Paxos raises, CB Insights identified crypto custody and infrastructure as a particularly fertile sub-segment, noting that San Francisco custody tech firm PolySign received $53 million and London-based custody business Copper raised $25 million. Keep an eye on this.