Chinese Blockchain Startups Got $3.5 Billion in 2019
There were 245 blockchain-related investment and financing events happening in China over the course of 2019, with a total of 24.4 billion yuan ($3.5 billion) invested, according to a recent report by Rhino Data, a local data-driven investment platform.
Both the investment and financing deals and amounts are roughly 50% lower than those in 2018, while significantly higher than in 2017. It is believed that the blockchain sector, with more favorable policies and rational capital invested, may usher in healthier and faster development in 2020.
Among them, early-stage financing events accounted for 43.3% of total investments. The second half of the year saw strategic investment and acquisition increase.
Blockchain news, market intelligence, crypto exchanges, defi and blockchain games are areas most favored by investors. Led by Bitfinex’s $1 billion financing, crypto exchanges have seen a surge in funding in 2019 with over 9 billion yuan invested, accounting for 37% of the total funding amount.
Crypto mining sector has also been prominent in 2019 as bitcoin mining machine manufacturer Canaan concluded its U.S. IPO, making it the first blockchain company to go public successfully.
Traditional VCs have taken a back seat in the past year, with most investments coming from newly formed crypto funds. However, the situation changed at the yearend with a plurality of financing deals heard after the country’s president Xi Jinping publicly applauded blockchain technology.
In addition, the nationwide blockchain craze and policy support have also attracted many Chinese blockchain entrepreneurs to move their startups back to the country such as crypto exchange Binance (though unsuccessful) and Huobi (which has set up headquarter in Hainan China).
According to the report, Beijing, Shenzhen, Hangzhou and Shanghai are cities where most blockchain financings happened, while there’s a trend that second-tier cities are catching up fueled by local governments’ great push.
Since the beginning of 2018, the investment in blockchain industry is growing explosively as the technology’s use cases and business models become clear. 2019 has proven to be a year when blockchain technology got down to business, making large steps in nearly every industry. With support from government, 2020 is certain to be filled with impressive developments.