KPMG Venture Capital Report: Investment in the blockchain field has weakened, and investors are more looking forward to practical applications (Download the full report)

Auditing giant KPMG and venture capital data company CB Insights released a new report (download the full text of the Coin Library). The report pointed out that with the sharp decline in investment in the financial technology field, Bitcoin and blockchain startups have also been affected to a certain extent.

The report, published yesterday, shows that venture capital funding for distributed ledger startups declined in the third quarter of 2016.

The report said that although the industry's enthusiasm for blockchain technology remains unabated, related companies must launch excellent proof-of-concept projects to impress venture capital firms again.

At present, there are still few examples of blockchain proof-of-concept projects successfully transferring to actual applications and production, and market participants seem to have ignored this point. Although the market still chooses to give blockchain companies a lot of space and time to prove themselves, investors have begun to pay attention to project results.

The report shows that in the third quarter of this year, Bitcoin and blockchain startups received a total of 8700万美元in investment, which is a decrease from the previous two quarters. The investment amounts in the first and second quarters of this year were 1.19亿美元and 1.53亿美元, respectively.

Another important message conveyed by the report is that as global transaction activity decreases, fintech investment has also weakened.

Anand Sanwal, CEO of CB Insights, said:

Although there are still many fintech companies around the world that have received large investments, the investment amount is showing signs of decline compared to the second half of 2015.

Overall, blockchain was ranked alongside robo advisors and artificial intelligence (AI) as the “most compelling” fintech tools of the coming years, assuming the success of proof-of-concept projects for the aforementioned technologies.

Recent Blockchain Investment Situation Around the World

Although the report shows that venture capital funding in the blockchain innovation field is generally on a downward trend, different regions always have different performances.

The United States and Denmark are seen as the most active players in blockchain investment, while Europe lags behind in this regard, which may be partly due to the uncertainty brought about by Brexit.

Asia’s recognition of blockchain’s potential and its vision to break down traditional boundaries with technology has led to a steady rise in investments in blockchain and financial technology in the region.

Raymond Chang, partner at KPMG China's fintech and innovation department, said in the report that investor enthusiasm has not diminished, but it is not obvious.

Venture capitalists have invested a lot of money in small and medium-sized blockchain companies in Asia. Some young companies have even entered the second or third round of financing.