Fresh analysis from KPMG shows that blockchain investment in the U.S. in the first half of 2018 has exceeded the overall total seen in 2017, according to its biannual “The Pulse of Fintech” report released today, July 31.
KPMG is one of the world's largest auditing firms, collectively known as “The Big Four” — alongside Deloitte, Ernst & Young and PwC.
KPMG suggests that blockchain tech is “moving beyond experimentation” to draw “significant” attention from investors in the first two quarters of 2018, noting that investments were typically more focused on experienced firms and consortia that sought additional rounds of funding, rather than on market entrants.
The report singles out peer-to-peer (P2P) payments firm Circle’s $110 million round led by mining hardware giant Bitmain and $77 million for crypto wallet Ledger in France as among the “good-sized” funding rounds in Q1 2018. It highlighted that the U.S. has already seen total investment in blockchain outstrip the annual total posted in 2017.
Other key blockchain takeaways from the report include the fact that the banking consortium R3 has expanded its mandate to include insurance companies, while major insurance consortium B3i has reorganized in order to commercialize its outputs. New blockchain consortia have continued to “crop up,” in particular those that are focused on developing blockchain-powered supply chain management solutions.
As regards initial coin offerings (ICOs), KPMG notes that the industry continues to flourish “despite” high-profile blanket bans on the fundraising model by countries such as China. The report draws attention to Cayman Islands-based EOS developer Block.one completing its year-long token sale in Q1 2018 to raise an industry record-breaking $4 billion.
The report also highlights impressive investments in U.K.-based challenger bank Revolut ($250 million this April), which added an option to transact in crypto in December 2017, and brokerage app Robinhood, “which raked in one of the largest deals in the first half of 2018” — $363 million in May to expand its crypto trading platform U.S.-wide.
In the wider fintech landscape, KPMG indicates that U.S.-based fintech firms have seen a surge in venture capital (VC) funding — exceeding $5 billion in the first half of 2018. Across VC, private equity (PE) and mergers and acquisitions (M&A), global fintech performance has been “exceptional,” exceeding the 2017 annual total and ”well on pace to exceed 2015’s peak.”
A report released by Crunchbase news in February anticipated that global VC fundraising for blockchain-based companies is well on track to exceed 2017 figures, noting at the time that the U.S. was ahead of other countries in investment figures.