VCs are bidding farewell to tech companies and investing in blockchain firms.
The world of venture capital is always in flux, and the last few years have been no different. In 2018, there was a lot of talk about how VCs bid bye to tech companies and instead were turning their attention to blockchain firms. In fact, VC investment in blockchain projects has been increasing at a rapid pace. In the first quarter of 2018 alone, VCs invested $1.3 billion in blockchain companies. VCs invest in Blockchain firms and Blockchain is still a relatively new technology. These investments are rather small in scale when compared to the funding required for developing large technology start-ups.
The reasons for this shift are varied, but the most common one cited is that VCs are betting on a change in user behaviour and see Web 3.0 as future. User behaviour has indeed changed dramatically in recent years, thanks in large part to the rise of the smartphone. Just a decade ago, it was unthinkable that people would be using their phones for anything beyond making calls and sending texts. Today, people are using their phones for everything from hailing a ride to ordering food to managing their finances.
As VCs look to the future, they see a world in which people are increasingly using decentralized applications (dApps) built on blockchains to do everything from buying and selling goods to transferring money. This shift is already underway, and the VC community is eager to invest in the companies that are building the infrastructure for this new world.
What does this mean for tech companies? VCs are still interested in invest in good tech companies, but the bar is now higher. In order to impress VCs, tech companies must now have a solid plan for how they will transition to the world of Web 3.0. Those that don’t make the cut are likely to find themselves losing out on funding to blockchain firms.
However, there is one area that has been growing: Blockchain firms.
According to a recent report by Pitch Book, a research firm that tracks the VC industry, blockchain companies have raised more than $3 billion from VCs in the past three years. That’s more than double the amount raised in the previous three-year period and it’s not just the amount of money being raised that’s growing. The number of VC firms investing in blockchain companies has also doubled in the past three years.
Why are VCs so interested in blockchain firms?
There are a few reasons. First, VCs believe that blockchain could be a major driver of user adoption in the coming years. Second, they see Blockchain firms as a way to reduce the costs of doing business. And third, they believe that blockchain could help create a more secure and efficient internet. User adoption is the key to any successful technology company. And VCs believe that blockchain could be a major driver of user adoption in the coming years.
VCs invest in Blockchain firms Blockchain is still a relatively new technology, and it’s only been adopted by a small number of users so far. But VCs believe that as more people learn about blockchain and its potential benefits, adoption will grow exponentially.