In general, blockchain businesses can generate money by selling the services or products that they develop.
However, I want to focus here on the way blockchain companies raise funds at the beginning of their journey or whenever they need to start a new project.
There are two ways they can make money in such situations:
- Attracting investors, such as venture capital firms or other type of companies;
- Organizing initial coin offerings (ICOs), a form of crowdfunding where the company issues tokens and investors (anyone can become an investor) buy them hoping for profit.
There are big blockchain companies that could attract cumulative amounts of dozens of millions (USD). For example, Digital Asset has accumulated $110 million during two funding rounds, one of which ended this week (with $40 million).
Here are the most funded blockchain companies that accumulated money from ventures and companies:
As you can see, Coinbase, Ripple, Blockchain info, and Digital Asset are in the top 10.
As for the investors, here are the most active companies that invested million in different blockchain entities:
As you can see, Google, Citi Bank, and Goldman Sachs are three giants that show interest in projects like Ripple, Axoni, Digital Asset, or Blockchain info.
From the US banks, other notable names are JP Morgan Chase (invested in Axoni, Digital Asset, Circle), Morgan Stanley (became part of R3 – a blockchain based consortium), Wells Fargo (became part of R3 and invested in Axoni), and Bank of America (part of R3 and Ripple).
As I mentioned, another form of investment are ICOs.
Year to date, more than $1.5 billion were raised through ICOs.
However, in the last months, more and more ICO issuers tend to fail – check the projects in red: