This presentation analyzes venture funding and the startup ecosystem around Bitcoin, cryptocurrencies and crypto tech / blockchan. The focus is not about speculative currrency / token token trading but on teams, companies and the equity side of investing. Beyond hype, looking at fundamentals.

1. BLOCKCHAIN & CRYPTO VALUES CONF | June 14 - Milan
Venture Capital and Crypto: The Equity Side
Raffaele Mauro

10. Beyond asset trading ….
…. looking at technology, teams and companies
The Equity side

11. Today
2018 (5 months):
$ 1.6 Bn VC investments in Bitcoin and
blockchain startups, exceeding the total yearly
amount of 2017, $ 911 M
ICOs in 2018:
A total amount of $ 5-8 Bn financed through
ICOs (depending on source), not including
Telegram’s and EOS’ offerings

12. 2015 2016 2017
2018
(to date)
Aggregate
funding ($ M)
490 601 911 1.678
N° of rounds 120 58 55 296
Largest round
($ M)
116 100 107 350
Crypto VC funding

13. 2017:
$ 16.5 Bn investments in Fintech companies globally
with 1165 deals
Q1 2018:
$ 5,4 Bn deployed across 323 VC backed equity deals.
A growing portion of the fintech industry is in crypto /
blockchain companies
Let‘s take a step back ...
.... looking at Fintech Funding

14. Why investing in Crypto Startups ?
The good reasons
• Future vision of decentralized Internet / “cypherpunk
dream”: protection against censorship
• New tech (e.g.: Lighting Network)
• Frontier market with high CAGR
• Access to a new asset class
• Opportunities outside Silicon Valley

15. Why investing in Crypto Startups ?
The bad reasons
• Media hype after 2015
• FOMO / herd behaviour
• Short run speculation

16. • Noise and scams
• Immature technology (excluding Bitcoin)
• Talent shortage
• Market volatility
• Regulatory risk
Why NOT investing in Crypto Startups ?

17. 2017 Top VC Deals (examples)
R3 is the largest consortium of global financial institutions
working on developing commercial applications for
distributed ledger technology. They recently raised $ 107 M
Coinbase, one of the largest and most well known digital
currency wallets, raised $ 108 M in Series D funding in
2017. They have now raised $ 225 M in total and have a
post-money valuation of $1.6 Bn
Digital Asset, a startup focused on distributing digital
ledger technology to financial institutions, raised $40 M,
reaching $ 107 M in total funding

18. 2018 Top VC Deals (examples)
Stock-trading app Robinhood raised about $350M in new
venture funding and added Bitcoin trading. They are now
valued at $ 5.6 Bn
Raised $ 75 M and launched a new solution for financial
institutions, the Ledger Vault, enabling banks, hedge funds
and family offices to manage their crypto assets.
Dfinity, an open decentralized platform for smart contracts
competing with Ethereum, received a $ 61 M investment from
Andreesen Horowitz and Polychain Capital

19. Source: Crunchbase data
Investments by geography
USA
Other
UK
Singapore
Unknown
Crypto & blockchain startups born in 2017-2018
USA Other UK Singapore Unknown
• USA holds only
35% of total
investments
• China and
Central Europe
in quick
expansion

20. Source: Coindesk
Who is investing?

21. Source: Coindesk
14 Rounds
$ 413 M Invested
6 Rounds
$ 150 M Invested
5 Rounds
2017 leading players (n° of rounds):
10 Rounds
17 Rounds
including ICOs

22. Specialized Crypto investors
Cryptoasset /
capital markets
firms
Venture firms

23. Institutional Investors
Source: Context Capital Partners LP

24. Large tech companies

25. Most active corporate crypto /
blockchain investors (2012-17):
Source: CB Insights – Global Fintech Report Q1 2018

26. Examples in Italy
The Rock Trading platform allows users to trade different crypto
currencies and tokens
Neutrino develops solutions for monitoring, analyzing and tracking
cryptocurrency flows
The Conio Bitcoin Wallet is an app that manages bitcoins with a very
user friendly interface, allowing users to safely store and exchange
the cryptocurrency

27. ICOs ...

28. Source: Wikiped
Definition
Initial coin offering (ICO) is an unregulated means of crowdfunding via use
of cryptocurrency, which can be a source of capital for startup companies.
In an ICO a percentage of the newly issued cryptocurrency is sold
to investors in exchange for legal tender or other cryptocurrencies.
The term may be analogous with 'token sale' or crowdsale, which refers to a
method of selling participation in an economy, giving investors access to the
features of a particular project starting at a later date. ICOs may sell a right
of ownership or royalties to a project.
(Wikipedia)

29. Source: Coinspeaker.com
2017-18 ICOs Boom
Total amount
raised
$ 9-12+ Bn
(depending
on source
and ICO
definition)

30. ICO ?
• Easy, fast and flexible
• Global
• Accessible to anyone
BUT
• Bubblish environment -> scams, dumb money &
noise / low quality projects
• Immature technology / not truly decentralized
• Distorted incentives for teams

31. July: Tezos, a platform for smart contracts and
decentralized applications, completed its ICO raising $
232 M in bitcoin and ether
December: Sirin Labs, a consumer electronics and high-
end smartphone manufacturer based in Switzerland
raised $ 157 M
September: Filecoin, a blockchain-based storage
network, raised more than $257M with an ICO
2017 ICO Deals (examples)

32. Dragon Coin is an Ethereum-based cryptocurrency launched by a
Macau-based hotel and casino corporation that is designed for
gamblers, raised $ 320 M
Bankera, who offer all the services of traditional banking but in a
decentralized way, raised more than $ 150 M in an ICO that ended in
March
2018 ICO Deals (examples)

33. Raised $ 1.7 Bn from private sale
investors, plans to build the TON
(Telegram Open Network),
a blockchain-based platform that
extends its already successful
messaging app with 200 M
monthly active users.
2018 Outliers (1): Telegram

34. Source: Cointelegraph.com
Raised $ 4 Bn with a long-run
“open” ICO.
EOS aims to be a decentralized
operating system supporting
industrial-scale applications, with
claims to eliminate transaction
fees and conduct millions of
transactions per second.
2018 Outliers (2): EOS

35. 1. Team and community
2. Technology/Product/Service
3. Blockhain / decentralization needed ? ICO needed ?
4. Token sale economics / incentives
5. Security
Evaluing ICOs

36. Future scenarios
Basic:
- Cryptofinance as sub-industry of Fintech innovation
Optimistic:
- Decentralized crytpotech as the new store of value and/or payment layer of
the Internet, like SMTP for email
- Re-shaping of entire industries: e.g. Internet of Things
Pessimistic:
- Bubble & crash in cryptoasset (second mega-bubble)
- Bubble & crash in VC in vestments
Utopian / Dystopian (its not a bubble, it’s the pin!):
- Decentralized technology radically disrupts governments, organizations and
financial institutions

37. Thank you!
rmauro@post.harvard.edu
raffa.mauro@gmail.com

38. Raffaele Mauro is passionate about technology, policy and global finance.
Now Managing Director at Endeavor Italy, he is focused on high-impact entrepreneurship and venture
capital, providing companies access to smart capital, talent and markets.
Previously he was Head of Finance for Innovation & Entrepreneurship at Intesa Sanpaolo and worked at
venture capital funds such as United Ventures (formerly Annapurna Ventures), P101 and OltreVenture.
Raffaele is a Kauffman Fellow and holds an MPA from Harvard University, a Ph.D. from Bocconi and is
alumnus of the Singularity University Graduate Studies Program at NASA Ames.
Raffaele co-authored the book “Hacking Finance”, an essay on Bitcoin, blockchain and cryptocurrencies,
and was invited speaker at EY EMEIA Accelerate, Wired Money and the Bundesbank. He invested and
advised several companies including Multiply Labs (YC 2016).
Raffaele is also Junior Fellow at the Aspen Institute, member of the Young Leaders group of the US-Italy
Council, member of the “Young European Leaders – 40 under 40” cohort of 2011 and member of the
executive committee at the Global Shapers Hub - Milano, a World Economic Forum community.
Twitter: @rafr