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ICO investment: Unusual sectors blockchain is disrupting

ICO investment

Initial Coin Offerings (ICOs; Token sales) took the world by storm in early 2017 in what is now known as the ICO boom period (or as some would have it, the ICO bubble). ICOs enabled entrepreneurs to raise funds from interested investors quickly instead of resorting to traditional fundraising mechanisms. With little to no regulation and hardly any associated fees, they appealed to entrepreneurs as an easy alternative to traditional routes of funding.

Two years later, ICOs have raised over $26 billion according to InWara’s ICO database — an unbelievable amount considering the short time frame. However, an interesting caveat is that while $26+ Billion has been raised, it remains a mystery how much FIAT was actually pumped into these ICOs.

Most of these ICO projects were restricted to sectors such as Blockchain Platforms or Financial Services which based on Satoshi’s paper were the obvious use cases. However, we are seeing a twist in the tale with entrepreneurs starting to explore business opportunities in novel sectors. 

Funds raised via ICOs by Industry Sector (April 2019)

ICO investment

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ICO projects launched during the month of April 2019 managed to raise a whopping $569 million. As impressive as that is, it’s not the most interesting part.

It’s that ICO projects from relatively new industry sectors such as Charity are taking the stage-as they’ve often been overshadowed by more eye-candy sectors like Financial services.

Don’t get us wrong, a majority of the funds raised was by three sectors alone-three sectors we’re familiar with- Trading and Investing, Business Services and Blockchain. These sectors alone raised ~$325 million between them. 

But interestingly, sectors such as Media and Entertainment, Real Estate, Gambling, Charity, Internet, Arts and Collectibles among others have raised significant funds-as much as $190 million between them.

All-time funds raised by industry sector

ICO investment

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A teardown of the funds raised by various industry sectors reveals some interesting insights. The single largest contributor to global ICO token sales were Blockchain Platforms at a whopping $9 billion (largely driven through EOS’s massive token sale), followed by Financial Services at ~$3billion.

What is also interesting to note is that hitherto unknown sectors such as Charity, Real Estate and Art & Collectibles which aren’t in the top ten sectors by funds raised are the sectors the new boy on the block — Security Token Offering — is looking to disrupt.

While we saw multiple projects to simplify payments, we may now be witnessing a turn of the trend as STO projects explore business opportunities in other sectors.

 

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