ICO Market Trends and News

The ICO market is fast moving and its interesting to see the volumes, capital and sectors that are raising funding.

A quick look at the types of ICO’s and their average funding show that Dapp marketplace, blockchain, distributed storage have attracted the most funding. This is part of an overall trend towards investors wanting to invest in fundamental building blocks over the blockchain ecosystem (storage and core tech). This could be for two reasons:

  1. It makes sense to back core technology as crypto currency is still in its infancy.
  2. Many of the early crypto adopters are technical in nature and can understand these projects.

ICO Project Types

The funding volumes have started to become consistent and have not fallen off as much as some of the doomsayers were predicting.

ICO Capital Raised

The interesting trend is that the average funding has been growing which is an indicator that the number of ICO’s successfully raising funding is going down. The indicators are that there are lots of ICO’s taking place however the funders are becoming more discretionary in the way they are selecting ICO’s.

ICO Average Raise

Evolving ICO Ecosystem and funding

The world of ICO’s and Series A is converging as more deals happen in the ICO space.  This is shown has by the fact that the median ICO size is becoming closer to that of a traditional Series A raise amount.

series_a_vs_ico

Source: http://tomtunguz.com/ico-trends/

Series A Funding rounds

By definition Series A is typically the first round of capital from Venture Capitalists.

Traditionally startups have to achieve significant traction (usually revenue) before institutional investors will invest and therefore it is a significant mile stone for startups that want to achieve high growth rates and put them on a path to more institutional funding rounds.

Series A funding often also comes with a new share class that gives Venture Capitalists more rights vs ordinary shares.

ICO Funding

In ICO funding there is no equity sale and therefore it is not directly correlated to Series A funding but it has become closely related based on the fact that the funding amounts are close and the businesses are early stage.

The ICO world is changing so quickly though it would be a mistake to put ICO funding as for only early stage startups, as more businesses are turning to token sales and even listed companies have started to get into ICO’s. An example of this would be Naga a listed Frankfurt business.

We believe the  ICO space will evolve and more and more later stage businesses will turn to token sales to raise capital.

A growing ICO market

Number of ICO vs Series A

Source: http://tomtunguz.com/ico-trends/

It is still early and you can see that the number of successful ICO’s is growing rapidly. There will be a maturing of this market as professionals and mature businesses become more involved in the ICO space.

How much can you raise for your ICO?

As of the end of 2017 the raising of capital has become more difficult due mainly to legislation in China and Korea. Due to this the huge funding rounds that happened in the mid 2017 market have largely disappeared.

Currently $30m raise is considered to be on the large size. When comparing this to a Series A round this would be a large funding round, however a Series B funding round is probably more in line.