Blockchain funding plummeted 54% in 2016

Despite strong growth in the first quarter from firms like Digital Asset Holdings, funding for blockchain companies decreased significantly in 2016.

Funding to venture capital backed blockchain firms has more than halved since the first quarter in 2016 compared to the fourth, according to statistics from CB Insights.

Since the first quarter last year, funding plummeted 54% from $153 million to just $69 million in the fourth quarter.

Despite this, the number of deals increased to 17 in the fourth quarter last year, compared to 14 the quarter prior.

CB Insights explained funding surged in the first quarter last year off the back of blockchain firms like Digital Asset Holdings.

In January 2016, Digital Asset Holdings raised $50 million in global funding from major companies like JP Morgan, ICAP, BNP Paribas and Citi.

The next month, the funding figure rose to $60 million when Goldman Sachs and IBM joined the group of investors.

Discussing the investment at the time, Paul Walker, global co-head of technology at Goldman Sachs, explained the investment bank believes blockchain technology “will play a transformative role in the way financial institutions transact globally.”

Digital Asset Holdings claims its software has the potential to significantly improve post-trade processing efficiency and security, while reducing cost, latency, errors, risk and capital requirements.

CB Insights’ report also found major investment banks continued to back FinTech companies in 2016, with Goldman Sachs, Citi and Banco Santander topping the list of investors.

Over the last five quarters, the three investment banks each made eight investments in FinTech firms.