Aussie VCs Continue To Ignore Blockchain Startups
If you ask a VC for their top 3 hottest verticals in fintech it’s likely that most will come back with blockchain tech very high up on their list. Unsurprisingly, VC investment in digital currency and blockchain startups has reflected this. Since 2012 over a billion dollars
has been poured into the sector with most funding
coming from U.S. based VC funds (and large international corporates).
However, when you drill down into the data it’s very interesting to see that in spite of Australia being the home of some of the most profitable banks
in the world (where most think blockchain tech will ultimately be most disruptive) almost no investments have been made by Aussie based VC funds into Australian digital currency and/or blockchain startups. This is in spite of a record year in terms of money raised
by the industry and every major bank experimenting with blockchain technology.
Being based in Australia this really stands out as a strange data point. Having spoken to a number of Aussie VCs about the industry many are very quick to espouse how disruptive blockchain technology will be across a variety of sectors. Yet almost none have put their money to work in this space. When you drill down and actually ask why this is the case the answers end up being extremely generic - “We just haven’t met the right company/founders”.
In my opinion, if this is your response your fund has a deal flow problem. The reality is that there are a number of amazing Australian (not to mention international) digital currency and blockchain companies who are building some great tech and getting real traction.
Given the fertile breeding ground for blockchain companies in Australia (i.e. a solid regulatory backdrop, many corporate customers and amazing talent) if you’re not investing in the industry now you’re missing the boat on what might end up being the most important vertical in fintech.
While for Aussie blockchain tech startups the lesson here is don’t pitch Aussie VCs - their wallets are slammed shut.
P.S - If you’re an Aussie VC (I know a number of you subscribe to this newsletter) feel free to ping me on Twitter
if I’ve got anything wrong or if I’m missing something. I’m always happy to be corrected.
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