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Blockchain startups lost a step in private markets last year after a popular 2018. Mentions of the technology in transcripts of public company earnings significantly decreased and total funding dollars fell over 30% in 2019, according to data by CBInsights.
But despite waning interest, investor activity in Q4 points to opportunities for a rebound in 2020. And Ripple could be in prime position to lead the way.
Investor interest points towards enterprise applications
Entrepreneurs are still trying to find new applications for the technology popularized by cryptocurrencies like Bitcoin and Ethereum. Other than crypto, some applications that show promise are in financial asset management, supply chain tracking, data workflow, cross-border payments, amongst a plethora of others, according to the report.
While companies in cryptocurrency exchange and mining hardware dominate fundraising in the blockchain sector, investor interest pointed towards enterprise applications in Q4 of 2019.
Ripple, an enterprise payments network, raised the highest amount of funding in Q4 of 2019 with a $200 million Series C round. That raise earned the crypto startup a valuation of $10 billion. The company hopes to disrupt the correspondent banking system—how banks transfer funds amongst each other—and the cross-border payments market.
Last month, Ripple’s CEO, Brad Garlinghouse, boldly predicted that “half of the top 20 biggest banks in the world will actively hold and trade digital assets in 2020.” Ripple, it appears, plans to manifest this prediction, as last month it announced a global expansion of the XRP Payments Network in 2020.
Aside from Ripple, companies looking to streamline business processes and to build infrastructure had a strong showing in Q4. Figure Technologies raised $103 million for its home equity loans platform Provenance. Digital Asset raised $35 million towards supporting its Digital Asset Modeling Language (DAML), used to develop “faster financial asset settlements.” Layer1 raised $50 million in Q4 towards building a new Bitcoin mining facility that runs on wind and solar power in Western Texas.
The previous year may have not been the strongest for blockchain startups, but the race to attract more investment and create new applications, infrastructure and market goes on.