Berlin, September 13, 2023: The CV VC German Blockchain Report 2023 shines a spotlight on Germany’s outstanding accomplishments within the blockchain sector, unveiling a remarkable 3% increase in blockchain funding and an all-time high share of global funding.
This comprehensive report encompasses data spanning from Q3 2022 to Q2 2023, revealing that the German blockchain sector experienced an impressive 3% year-over-year surge in funding, totaling an impressive $355 million across 34 deals. In stark contrast, all continents witnessed declines in year-over-year funding, with a staggering 62% drop in funding and a 44% reduction in venture deals when compared to the preceding four-quarters.
The long-term trajectory of blockchain venture funding paints an upward trajectory. The German Blockchain Report 2023 presents its findings in the context of a meticulous assessment of both sector-agnostic and blockchain funding from a global and European perspective. While its primary focus is Germany, this report efficiently compiles comprehensive global data insights. For instance, it highlights the fact that the long-term trend of blockchain venture funding as a percentage of global sector-agnostic venture funding has been on the rise. This percentage of funding and deals has surged from 2.1% and 3%, respectively, in 2018 to reach a peak of 6.7% and 7.2% in Q2 2022. However, there was a subsequent decrease, settling at 3.9% for funding and 5.2% for deals during the period from Q3 2022 to Q2 2023.
In a global landscape that faced challenges over recent quarters, Europe distinguished itself by reaching a historic high in its share of global blockchain venture funding, surging from 18% to 26% compared to the previous four-quarter period. Within Europe, Germany emerged as a leading player in the blockchain arena, as evidenced by key findings from the CV VC German Blockchain Report 2023:
1. All-Time-High Share: Germany achieved a record-high share of global blockchain funding, underscoring its growing importance in the blockchain sector. It attracted 2.4% of global blockchain funding and 2.5% of global deals, marking a significant increase from the previous year’s figures of 0.9% and 1.9%, respectively.
2. European Leadership: Germany secured 9.4% of European blockchain funding and 10.3% of all European blockchain deals, firmly establishing its leadership within the European blockchain ecosystem.
3. Focus on Blockchain: German blockchain venture funding accounted for 4% of German sector-agnostic funding and 5.5% of deals, signaling a growing emphasis on blockchain technology. Among Europe’s seven mega blockchain deals, one took place in Germany, with Matter Labs, the creators of zkSync, securing an impressive $200 million in funding.
4. Majority Early-Stage Investments: The report unveils that a substantial 72% of German blockchain investment is directed toward early-stage and seed rounds, indicative of a thriving startup environment.
5. Impact on Established Industries: While leading German corporations like BMW, Siemens, and Zalando have already integrated blockchain into their products, services, and customer experiences, the report illustrates how blockchain’s influence extends to other traditional German business sectors such as energy & sustainability, entertainment, and health. This shift signifies a move toward digital and decentralized paradigms. Pioneering companies like Tradar (football player tokenization), Krowdz (creator economies), Greentrade (climate change mitigation), Vita DAO (health and age research), and Xylene (raw material supply monitoring) are leading the charge in these incumbent industries.
6. Regional Hubs: Berlin remains at the forefront of the blockchain industry in Germany, responsible for 61.8% of the total number of deals and an astounding 93% of the nation’s blockchain funding. However, other regions, like Hamburg, are emerging as blockchain innovation hubs.
7. Sector Highlights: Investors have shifted their focus towards DeFi (Decentralized Finance) and infrastructure projects, particularly those addressing blockchain’s role in modernizing financial markets and enhancing interoperability and data management.
- DeFi: Decentralized Finance took center stage, accounting for 32% of investments. Notable recipients of DeFi funding included M^ZERO Labs, Li.Fi, and Unstoppable Finance.
- Infrastructure and Developer Tools: Infrastructure and developer tools received 15% of investments, a significant increase from the previous year’s 6%, demonstrating a strong commitment to fortifying the blockchain ecosystem. Many of the newly funded projects in this category bridge the gap between traditional and new systems, such as Februar and Spyce.5.
- Identity & Data: The CV VC German Blockchain Report highlights companies leading Germany’s blockchain expertise in identity and data verification. Entities such as Certif-ID, Violet, Blockbrain, and Chain Patrol received funding in recent quarters. Germany’s actions in this field are not limited to Web3 but extend to existing institutions and services.
The report also features insightful articles addressing key challenges, contributed by esteemed figures such as Dr. Nina-Luisa Siedler of Möhrle Happ Luther, as well as teams from The Hashtag Association, BerChain, Berlin Partner, and other prominent voices in the field.
It underscores Germany’s unique advantage and points to Europe’s evolving regulatory landscape under MiCAR, which prioritizes privacy and personal safety. This German framework has proven attractive to blockchain and Web3 tech professionals and businesses. However, with the concurrent evolution of the AI landscape and Germany’s economy facing potential recession, incumbent players acknowledge the need for investments to support its champions and, indeed, to keep the German economy ahead of the competition.
Ulrike Lierow-Schad, Managing Director of CV Labs Berlin, expressed, “Germany has firmly established itself as a hub for blockchain advancements and could serve as a model for other regions. I encourage investors, businesses, and policymakers alike to leverage the insights provided in this report to foster the continued advancement of the blockchain ecosystem. By advancing regulations, I believe Germany can pave the way for deeper collaboration between its robust financial sector and the cutting-edge world of blockchain technology, to enhance processes, increase transparency, and drive innovation.”
Find the full German Blockchain Report here: German Blockchain Report 2023
About CV VC: Global Seed Investor Empowering Blockchain Tech Startups
CV VC is a global blockchain investor, operating ecosystem acceleration hubs across Switzerland, Liechtenstein, South Africa, Germany, and Portugal. As a private venture capital firm, CV VC provides seed funding and an acceleration program to transformative technology teams worldwide in exchange for equity or tokens. CV VC’s expertise extends to offering blockchain industry consulting and advisory services to corporates and governments.
As pioneers in the Crypto Valley, the birthplace of Ethereum and home to numerous blockchain unicorns, CV VC and CV Labs are at the forefront of shaping Web3 dynamics. With a track record of 59 investments in blockchain startups, CV VC has an entrepreneurial spirit, championed by its visionary founders and board members who embody the ethos of “Founders for Founders.” Notable individuals include Alex Wassmer, an esteemed industrialist serving as Chairman of CV VC, Yvonne Bettkober of the Volkswagen Group, Philipp Rösler ex Vice-Chancellor of Germany, Mathias Ruch and Olaf Hannemann.
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