Despite rising regulatory concerns, several of the top venture funds in Asia are investing in blockchain and crypto companies in the regionand around the world.
From January 2021 to June 2022, the top 20 VCs (based on the number of blockchain/crypto-related deals they've participated in) participated in 495 investments globally.
The active investors were mainly from China and Hong Kong. Most of the investments went to companies based in the US, followed by Singapore and India.
Asia-based investors funding blockchain companies globally
The top 5 active investors based on the number of blockchain deals they participated in globally were AU21 (59), Fenbushi Capital (45), GBV Capital (43), HashKey Capital (41), and NGC Ventures (38).
These leading investors directed their capital toward blockchain companies based in the US, including:
- CertiK, a security-focused ranking platform that analyzes and monitors blockchain protocols and DeFi projects
- MobileCoin, a payments platform
- FalconX, a crypto trading platform
- InfStones, a blockchain development program
Asia-based investors backing blockchain companies headquartered in Asia
The top 5 investors based on the number of deals to Asia-based blockchain companies were AU21 (25), GBV Capital (24), Fenbushi Capital (19), HashKey Capital (19), and NGC Ventures (19).
These firms mostly directed their capital to blockchain companies in Singapore, including:
- Crypto trading software company Zignaly
- Hex Trust, a custody provider for digital assets
- Gamified platform StarryNift
- EthSign,which develops decentralized digital platforms for signing electronic agreements through Ethereum, IPFS, and Filecoin technology
Most popular investment: Blockchain development platforms
In all, 13 of the 20 largest VCs in Asia have invested in blockchain development platforms or infrastructure in the last 18 months.
Fenbushi Capital and Hashkey Capital have invested in 4 and 3 companies, respectively —including Blockdaemon and InfStones from the US, and Singapore-based Stake Technologies.
These VCs are also investing in DeFi projects and NFTs, which are 2 of the fastest-growing crypto sectors.
The road ahead for VC investment activity in Asia
Singapore has emerged as a hub for blockchain initiatives in Southeast Asia. For example, the $12M Singapore Blockchain Innovation Programme launched in 2020 to boost the growth of the local blockchain ecosystem. In Coincub's world crypto ranking for Q4 2021, Singapore was ranked as the world's leading crypto-ready country.
Another country that could catch the interest of investors in the future is India. Currently, India houses roughly 230 startups catering to the crypto space. However, the country's crypto industry is dealing with tax-related complications as the government is imposing taxes to limit trading. Still, this is not impacting investments in Web3 enterprises — VC investments in these startups will likely continue to dominate in 2022.
Asia-based VCs will also continue to fund companies headquartered in the region. The region's Web3 scene is ideal for startups in the space that offer consumer-facing services. Besides the consumer demand, Asian countries like Singapore also attract entrepreneurs with their open-minded approach toward crypto, which has come under growing regulatory scrutiny in the US.
Regulators in Asian countries are developing frameworks that will govern digital assets in the coming years.
