Total global blockchain funding in 2021 was up by 713% to hit $25.2 billion from the previous year’s, a report by CB Insight has shown.
The report titled, State of Blockchain, analyses the global data and analysis on dealmaking, funding and exit by private market Blockchain companies last year.
According to the report, venture funding to blockchain startups hit new heights every quarter of 2021, driven by growing consumer and institutional demand for crypto.
Key highlight of the report
- Blockchain funding accounted for 4% of global venture dollars, up from just 1% in 2020. That share is likely to rise in 2022 thanks to emerging crypto, NFT, and Web3 startups.
- The number of Blockchain deals increased by 88% to reach 1,247 almost doubling 2020’s 662 and amounting to give Blockchain deals per business day. This is the first time the number of Blockchain deals crossed 1,000.
- 79% of deals were early-stage, signaling a nascent market of developing companies — and an even healthier funding environment in 2022 as startups mature and find product-market fit.
- A total of $15.5 billion mega round funding was recorded during the period. Out of this, over $100 million mega-rounds were the driving force behind Blockchain’s mega funding round with 59 mega-rounds in 2021 accounted for just 5% of total deals but 60% of total funding – the biggest mega-round deals went to crypto exchanges, brokerages, NFTs, gaming, and payments.
- The global blockchain unicorn count jumped from 9 to 47 in 2021 with a whopping 40 unicorn births (and 2 public exits). Over half of blockchain unicorns are based in the US (26), followed by Asia (10) and Europe (5) while Crypto exchange FTX leads with a $25 billion valuation and NFT marketplace OpenSea followed as second at $13.3 billion.
- US-based startups raked in $14.1B at 56%— more than half of all funding in 2021. 75% of deals were in early stages, suggesting the funding surge is still in its infancy. US funding in fourth quarter of 2021 grew 104% quarter on quarter to hit $6.3 billion. There were 6 deals worth over $400 million, and the majority of these were Series A or B – another signal of a still developing (but enthusiastic) market.
- Crypto capital of the US, New York-based startups raised 46% of US funding in 2021 at $6.5 billion, led by massive Q4 rounds from NYDIG ($1 billion) and Celsius Network ($750 million). Silicon Valley is number 1 for overall VC funding, and number for blockchain at $3.9billion while Los Angeles and Miami are tied for third, each seeing just over $760 million in 2021.
- Coinbase Ventures funded 68 blockchain startups in 2021, the most of any investor. Portfolio companies span from crypto exchanges (FTX) to institutional services (Amber Group) to DeFi wallets (ConsenSys). China-based AU21 took the number 2 spot with 51 companies, followed by Andreessen Horowitz at 46.
- A quarter of all blockchain funding in 2021 went to crypto exchanges and brokerages. The category’s total — $6.4B — represents a 1,180% increase in funding from 2020. While the biggest deals went to global players like FTX, country-specific exchanges are on the rise. The biggest Q4 deal in Asia went to India-based exchange CoinSwitch Kuber ($260 million).
- Funding to NFT startups grew an astounding 130 times (12,878%) to reach $4.8B. Investors believe in the promise of NFTs as collectible assets, drivers of brand equity for companies, and playing a significant role in Web3 and the metaverse. Gaming, marketplaces, and infrastructure are the 3 NFT categories driving the funding craze.
- Decentralized finance (DeFi) caught fire in 2021 as venture deals nearly doubled YoY to hit 240. Higher-than-average yield products, more efficient transactions, surging consumer demand, and growing interest from institutions make DeFi an attractive bet for investors. DeFi funding dollars grew 851% YoY to reach $3.4 billion.