Many industries have “best of” lists and rankings that insiders love to peruse. Now venture capitalists focused on blockchain technology have one of their own.
New York-based Digital Currency Group, which invests exclusively in crypto and blockchain companies, has made 58 investments total and 15 over the past 12 months. It has invested $78 million overall.
Of the 50 VCs, 18 are investing exclusively in cryptocurrency and blockchain companies or have dedicated digital asset funds.
Pantera Capital, based in Menlo Park, Calif., came in second, and Blockchain Capital of San Francisco came in third. Andreessen Horowitz, which recently announced a $300 million crypto fund, came in No. 4.
What’s Behind the Rankings
Crypto Fund Research, a cryptocurrency and blockchain research group formed in 2017, developed the list by compiling investment data from Crunchbase as well as its own research, which it sells to research organizations, fund managers and blockchain startups. The firm ranks each VC using four separate criteria: overall investment activity, capital outlay, blockchain investment experience (time since first investment) and recent activity (blockchain investments made in the past 12 months). The overall ranking is the sum of the rankings in the four categories.
“The four criteria we used reflect not only total investment, but also how long they’ve been investing in blockchain and how active they are today, not just a year or three ago,” Josh Gnaizda CEO of CryptoFundResearch tells ThirtyK. “The industry is changing rapidly. So what’s most accurate today won’t be as correct next month. We do, however, intend to keep this page updated frequently. That’s why we really wanted to establish criteria that can be replicated.”
Gnaizda says that almost all the VCs in the top 10 should be well known to those involved in the investing world, although there are a couple located in China (Node Capital at No. 5 and Ceyuan Ventures at No. 9) that may be less familiar to “those of us with a bit of a Western bias.”
Insight Into Investing Trends
Crypto Fund Research also used aggregated data from the Top 50 VC list to reveal investment trends.
Of the 50 VCs, 18 are investing exclusively in cryptocurrency and blockchain companies or have dedicated digital asset funds. Of all the blockchain investments by the companies on the list, 53.7 percent have gone toward seed rounds of financing.
Meanwhile, the pace of investments among the top 50 firms has picked up sharply this year, the data show. As of June 15, there were 216 investments in 2018, versus 236 for all of last year. The amount invested so far this year, $637.7 million, has already surpassed the 2017 total of $496.7 million.
“It’s not a complete shock that investment in blockchain startups is strong,” Gnaizda says. “However, given falling cryptocurrency prices and a still uncertain regulatory environment, I don’t think we fully anticipated the magnitude of total investment in just the first half of 2018.”
With any “top list,” there is always room for debate. “If you’ve created a ‘top list’ and there isn’t a bit of disagreement I suppose it’s not a very interesting topic,” Gnaizda says, adding that he hopes the list will provide clarity in an area where there hasn’t been a lot of reliable public data.
“It’s certainly more interesting to me than another top 10 celebrity fill-in-the-blank list.” Gnaizda says. “In fairness, we’re sort of finance nerds.”