As investment in FinTech continues to rise, investors are becoming more selective in doling out money to startups, including those focused on bitcoin and blockchain. "There’s an increasing realization that [FinTech] is a specialized sector," said Jalak Jobanputra, founding partner of Future Perfect Ventures. "It’s the realization that a lot of this does take extra time and the regulatory landscape is uncertain, and you need to invest in companies and entrepreneurs that understand that and have expertise and patience."
The hesitancy is with both pure play venture capitalists and corporate investors.
Global funding of FinTech startups reached an all-time high in 2015 at $13.8bn , up 106% from the $6.7bn invested in 2014, according to a March report by CB Insights .
Last year, blockchain and bitcoin startups received record-high funding at $474m, and it was the first time those categories of companies secured mid-stage Series C rounds.
Matthew Wong, research and data analysis at CB Insights, the consulting firm that co-sponsored the report, says big deals in blockchain will continue in 2016, although the space is maturing.
Instead of funding in mining and wallet startups, investors will look to broader applications for things like fraud and compliance, he said. No more naivety
But 2015’s increased mega-rounds of $50m or more, coupled with the low number of deals in Q4 2015, signals the investor class is becoming more discerning, willing to put large amounts of money in proven business models and less willing to make deals on theoretical use cases.
While large deals headlined 2015, these tapered off in the last two quarters of the year. There were 154 deals in Q4, the lowest quarterly total since Q1 2013.Mega-rounds increased dramatically, though, with 60 in 2015 up from only 15 from 2011 to 2013.A more perceptive investor community could, in turn, indicate a future shake […]
