The New Land of Crypto Fundraising Is in Asia and Europe, Says PwC

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Most of the fundraising in the cryptocurrency space shifted from the Americas to Europe, Middle East, Africa and the Asia Pacific region.

Most of the fundraising in the cryptocurrency space shifted from the Americas to Europe, the Middle East, and Africa (EMEA), and the Asia Pacific regions (APAC), according to a recent report by Big Four auditing firm PwC.

According to PwC’s 2nd Global Crypto M&A and Fundraising Report, during 2019, fundraising efforts in the crypto space obtained 18% less funding, while funds in mergers and acquisitions (M&As) in the space decreased by 40%.

As funding decreased overall, APAC and EMEA’s share of the pie got larger. While APAC and EMEA saw 44% of combined fundraising and M&A deal value in 2018, that percentage grew to 51% in 2019.

Over the same time period, the Americas’ share of combined fundraising and M&A deal value decreased from 55% to 48%.

This shows that the decrease in the number of funds in the crypto space was more pronounced in the Americas than in other regions.

Fundraising and M&A value by region, 2018 and 2019. Source: PwC 

APAC and EMEA regions to further grow in importance

PwC expects the shift from the Americas to the aforementioned regions to continue throughout this year, stating:

“2019 saw APAC and EMEA play a bigger role in the global crypto M&A and fundraising space. We expect to see this trend to continue in 2020. In particular, we expect to see more activity from APAC and EMEA based family offices looking at the market turbulence as a good time to enter the market.”

Overall, PwC states that the cryptocurrency industry continued to mature in 2019 as funds started moving to later-stage companies. In 2018, 71% of funds were raised by seed-stage firms while in 2019 seed-stage companies received 59% of total funds.

Crypto firm fundraising by development stage, 2018 and 2019. Source: PwC 

Funding for crypto startups dries up

As the PwC data shows, not only did funding for crypto firms decrease but funds meant for early-stage startups shrunk as well. As Cointelegraph reported at the end of 2019, after funding in the space peaked at $5.5 billion in 2019, less that $3 billion flowed into the crypto ecosystem in 2019.

Twitter co-founder and CEO Jack Dorsey — who also founded crypto-friendly payments firm Square — recently announced a grants program for open-source Bitcoin (BTC) development in an attempt to help improve the ecosystem.