附近上门

As venture capital firms continue to flood the crypto and digital asset space with more money, a stampede of unicorns is emerging unlike anything the space has ever witnessed.

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According to 附近上门 data, 18 unicorns鈥攃ompanies with a valuation of $1 billion or more鈥攈ave been newly minted this calendar year. That鈥檚 about two-thirds of the total amount of unicorns in the crypto space in total.

Those valuations have been driven up by the more than $12.1 billion in venture dollars invested globally in the crypto sector 鈥� 3x what all of last year saw.

鈥淔or a long time there were a lot of investors looking,鈥� said , a general partner at San Francisco-based 鈥� which has invested in crypto unicorns such as , , , and others. 鈥淣ow you just have a lot of people who have come around.鈥�

Why now?

There is no hot trend or complicated explanation for why crypto is having its moment right now, say those in the industry. Rather, it is the maturation of the industry and everything that goes along with that evolution that is making companies like , and hit the magical unicorn mark.

One of the main aspects of that maturation is the buildup of the ecosystem around crypto, which is now starting to create its own $1 billion-plus companies. While exchanges like Coinbase and San Francisco-based Kraken may come to mind first when thinking about buying and selling crypto, multiple layers are being built out in the industry to help people manage, report and secure digital assets.

Just this year alone, companies that have raised large rounds in crypto offering various services include:

• France-based security and infrastructure solutions provider Ledger raised a $380 million Series C at a $1.5 billion valuation in June.
• New York-based , which helps with a variety of business issues around digital assets from security to compliance to governance, raised a $310 million Series D at a $2.2 billion valuation in July.
• New York-based Paxos, which builds infrastructure to enable movement between physical and digital assets, raised a $300 million Series D at a $2.4 billion valuation in April.

Bogart said there is a tremendous amount of investment interest around companies in the crypto sector that help with compliance, tax and accounting, and insurance, as well as digital wallets.

鈥淭here definitely is rising interest in 鈥榩ick-and-shovel’ companies in the space,鈥� said , co-founder and CEO of Utah-based , which provides tax and accounting software to help with tax calculations and reporting on cryptocurrency transactions.

Big checks

TaxBit recently became a unicorn in the crypto space when it closed a $130 million Series B earlier this month. The company has raised $230 million this year alone.

Woodward said the company raised its Series A and Series B within about seven months of each other due to its faster-than-expected growth, as well as significant investor interest in the company.

鈥淲e just had folks who couldn鈥檛 get into (the Series A) round,鈥� he said. 鈥淭hen we hit key milestones. We did it a lot quicker than was forecasted, so we decided to raise.鈥�

TaxBit鈥檚 Series B serves as a good example of another trend the crypto industry is seeing: Big growth and institutional investors exploring the digital asset space and dedicating whole teams to look for investment opportunities.

Large firms such as , , , and others all have made significant investments in the space, pouring more money into funding rounds and helping raise valuations.

鈥淩elative to past years, you are just seeing a lot more late-stage investors in the space,鈥� Bogart said. 鈥淭hese firms need to deploy large checks and now they have people dedicated to this space.鈥�

Legitimacy and regulation

The embracing of the crypto world by more traditional banks, investment institutions and companies likely has helped jumpstart many of the large growth firms and institutional investors into the space after years of shying away.

Financial services companies like and have made clear bets in the sector, and even has plans for its own digital wallet and currency鈥攏ow called Diem.

鈥淚 think people feel there is more legitimacy now,鈥� said , CEO and co-founder of , which has invested in crypto companies such as Coinbase and .

Companies going public in the space like Coinbase, Circle and also have further justified the space鈥攅specially with investors now clearly able to see the volume handled by those companies.

鈥淚 think that is very validating,鈥� Tusk said.

While crypto鈥攍ike many sectors currently awash in venture capital money鈥攎ay eventually see a slowdown, the investment and general economic interest in the space shows it is now an accepted financial tool, added Tusk.

Although crypto recently has made headlines for regulatory issues鈥攊ncluding China cracking down on mining due to energy concerns and issues over unclear language concerning crypto in $3.5 trillion infrastructure bill鈥擳usk does not see regulations as an obstacle for the industry, but rather an opportunity.

鈥淚 think what you are seeing with the number of unicorns and the amount of investment is that this isn鈥檛 going anywhere,鈥� he said. 鈥淭hat should resonate with regulators. This is a big economic opportunity and you can鈥檛 bury your head in the sand.鈥�

鈥淭his is real and it鈥檚 something you need to deal with,鈥� he added.

Methodology

Crypto, as defined in this article, includes startups in the 附近上门 dataset that are working within the industries of cryptocurrency and blockchain.

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