KPN Ventures Research Series: European blockchain investment landscape

However, the technology has outlived the hype and now displays strong signals of challenging the status quo across industries. Yet, concrete applications for blockchain technologies are still in their early stages. For the technology to reach mass adoption, it requires the collaboration between many stakeholders, and clear business cases to ultimately improve people’s lives.

From an investor point of view, we see that the total investment amount in European blockchain companies has increased simultaneously with the number of rounds. In 2014, the investment amount reached €112M, while the number grew to an impressing €725M in 2018. Yet, both the investment amount and the number of rounds are expected to decrease versus the 2018 peak, reaching €530M in 2019. Further investigation shows that the influx of capital moves most dominantly into growth and later-stage investments, while the number of seed-stage investments is declining. The number of investments with the participation of corporate investors is also limited. However, the amount invested in those deals is high compared to other deals and grew from €16M in 2014 to €272M in 2018. Overall, the market has grown steadily, indicating an emerging adoption of the technology and maturity of the investment market.

In Europe, the most active countries in terms of investment are the United Kingdom, Germany and Switzerland, completing 173, 91 and 65 deals from 2014 to 2018, respectively. Switzerland’s and France stand out in 2018 with the top three most significant deals in terms of deal-size, wherein the investment in the Swiss supercomputing foundation Dfinity was the largest at €93M. Moreover, the United Kingdom holds the highest density of accelerators specialized in blockchain, resulting in the most robust ecosystem for entrepreneurs to grow.

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The lack of common standards and clear regulations is a significant limitation on blockchain applications ability to scale. In that regard, we identified a clear trend in the increasing amount of industry consortium established. A blockchain consortium is a collaboration between different players in an industry to accelerate the adoption of a specific blockchain application, facilitating the sharing of verified data across participants. Only five consortia were formed before 2016, while in 2018 alone, 70 new consortia were created, and the number is expected to grow to 94 in 2019.

Over the last four years, KPN’s New Business division has been actively investigating the application of blockchain technology for a variety of purposes, including identity, hosting & security. As an example, KPN is developing a Blockchain-based Decentralized Identity capability and host a consensus node in NEO MainNet to help to build the global blockchain ecosystem actively. KPN also investigate the role of MNO’s when it comes to hosting permissioned ledgers.

In case you have any questions regarding the market developments, data or activity within KPN Ventures, feel free to comment or ask questions by sending us an e-mail at kpnventures@kpn.com .

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