The fifth edition of the CV VC Top 50 Report has been released on the 16th of September. Ralf Kubli, Director CV VC, is the author of the report and discussed the key findings with CV Post
Key findings of the Report:
The impact of the crisis was difficult to assess in the beginning. It was clear that funding for startups would get more difficult, other impacts were more difficult to assess. I believe that the Crypto Valley Ecosystem has proven that it reached critical mass, where the positive effects now enable growth in the most difficult times. Market capitalization has increased due to specific large funding rounds of more mature companies, and the excitement around protocol development and DeFi.
There is a mix of reasons for the overall strength continued growth of Crypto Valley. First, the regulator framework is clear, and this clarity continues to attract many companies and founders. Second, the variety of communities present in Switzerland and Liechtenstein have energized each other. Developers, companies, universities, investors, legal and accounting service providers are by now so numerous, that positive effects are re-enforcing each other. Third, the financial sector has again attracted significant Venture Capital.
We can see that more and more institutional players are building infrastructure for new business models in their respective sector. Supply chain in industrial environments, storage solutions for digital assets and financial services, are some of the most happening areas.
The solid financing rounds which resembled Series B and C rounds of multiple players were surprising during the crisis. Given all the delays and difficulties in closing on investors, it is a very positive signal that significant financing rounds took place despite the crisis.
Protocols like Tezos and Cardano have delivered on important milestones and this is what receives the attention of the technical community. Ethereum continues to have the largest community of developers. With financial applications, also referred to DeFi, Decentralized Finance, on the Ethereum Network, many new and exciting solutions have been developed. At times, this reminds us of the irrational exuberance during the ICO wave in 2018.
There are very few, if any places in the world where financial institutional players and startups in the blockchain and crypto industry can have discussions without fearing prosecution from regulators. In addition, the law of numbers plays in favor of innovation. Among the large numbers of players in Switzerland and Liechtenstein, just a few willing to experiment will enable innovation with global impact.
All the critical players are present in numbers well above the critical mass required to foment the successful creation of world class leading innovation and subsequent adoption: Developers, researchers, corporates, regulators, communities driving innovation in specific verticals. The biggest difficulty remains finding venture capital for rounds above CHF5M.
We can expect big things to happen in at least two core areas. First, protocols will keep on delivering exciting new technology, resulting in more adoption. Second, many financial service players are getting ready for the new DLT Act entering into force in Switzerland early in 2021. We will see completely new possibilities in how financial assets and instruments are traded, stored and transferred between owners. And this will only be possible in Switzerland!