The Blockchain 50: The New Company Ranking You Need to Know for the Future
By: David Wyld
Tags: Blockchain, Business, Investing, Bitcoin, Security

Overview

We have become addicted to lists. Want Exhibit A? Just check out your newsfeed on social media. Skynet knows this. Think of how many articles you see on a daily basis that begin with titles like: “The 10 Best…,” “The 5 Most…,” and “The 25 Greatest…” Odd-on, the answer is many of them. Why? Because we, as individuals and as a society, are both curious about rankings — “who” or “what” are in the list, and even more interestingly in many cases, who or what are not on the list.

But well before we began clicking on, reading, sharing and debating the endless lists we see today of the “best” action movies, brownies, and quarterbacks, the world of business has had its share of lists — lists that companies have worked hard to be a part of. Being included in the most prestigious lists, like the Fortune 500 or the Inc. 100, have long been considered aspirational goals for companies, both large and small alike. Companies want to be on “best of” lists for places to work, for customer service, etc., and yes, they guard against being on the “naughty lists,” like those for being on the opposite side of being “good” when it comes to perceptions of employees, customers and even investors.

So while lists are perhaps considered to be overly important today, they are a reality in the business environment. And as such, they can be a leading indicator of important changes coming about in the economy and in technology. As a strategic management professor and consultant, I read with interest how the research firm CB Insights has now produced the first “Blockchain 50” list. Their just released report, entitled “Blockchain 50: The Innovators Using Blockchain & Crypto To Transform Industries,” is an indicator that blockchain — which is yes, still a new, complex and foreign concept to many of us — is growing in prominence in the world of business and holds the potential of becoming one of the key technologies for the future.

The Blockchain 50

If you have heard of blockchain, it was likely in regards to Bitcoin and cryptocurrencies. However, the blockchain concept has applicability well beyond these areas, as it holds the potential to revolutionize the way we store, secure and use data in general. For a quick overview on blockchain, you can see Investopedia’s take on the concept in Figure 1 (Blockchain Explained) below:

Figure 1: Blockchain Explained

And so in looking at the recently released Blockchain 50 list, presented below in Table 1, there are several key takeaways. These will be discussed in the Analysis section that follows.

Table 1: CB Insights’ Blockchain 50

1 — Coinbase (United States): $539 million

Internet Software & Services (Category: Exchanges)

2 — Bakkt (United States): $483 million

Asset & Financial Management & Trading Software (Category: Digital Asset Services)

3 — Bitmain Technologies (China): $450 million

Specialty Computer Hardware (Category: Mining)

4 — Bitfury (Netherlands): $170 million

Specialty Computer Hardware (Category: Mining)

5 — Chainalysis (United States): $167 million

Internet Software & Services (Category: Blockchain Analytics)

6 — BlockFi (United States): $163 million

Accounting & Finance Software (Category: Custody & Wallet Services)

7 — Digital Asset (United States): $142 million

Internet Software & Services (Category: Infrastructure & Development)

8 — R3 (United States): $112 million

Internet Software & Services (Category: Infrastructure & Development)

9 — SEBA Crypto (Switzerland): $104 million

Asset/Financial Management (Category: Digital Asset Services)

10 — Paxos (United States): $93 million

E-Commerce (Category: Capital Markets)

11 — Ledger (France): $86 million

Computer Storage & Peripherals (Category: Custody & Wallet Services)

12 — BitGo (United States): $86 million

Internet Software & Services (Category: Custody & Wallet Services)

13 — Blockchain (United Kingdom): $71 million

Internet Software & Services (Category: Custody & Wallet Services)

14 — Anchorage (United States): $57 million

Internet Software & Services (Category: Custody & Wallet Services)

15 — Axoni (United States): $56 million

Internet Software & Services (Category: Capital Markets)

16 — BitPanda (Austria): $52 million

E-Commerce (Category: Exchanges)

17 — Layer1 IT Services (United States): $52 million

IT Services (Category: Mining)

18 — Bitcoin Suisse (Switzerland): $49 million

Internet Software & Services (Category: Custody & Wallet Services)

19 — ErisX (United States): $48 million

Internet Software & Services (Category: Exchanges)

20 — Fireblocks (United States): $46 million

Internet Software & Services (Category: Digital Asset Services)

21 — Securitize (United States): $39 million

Internet Software & Services (Category: Capital Markets)

22 — Bitwala (Germany): $38 million

Internet Software & Services (Category: Consumer Wallets)

23 — Abra (United States): $36 million

Mobile Software & Services (Category: Consumer Wallets)

24 — Bison Trails (United States): $31 million

Internet Software & Services (Category: Infrastructure & Development)

25 — CoolBitX (Taiwan): $30 million

Consumer Electronics (Category: Infrastructure & Development)

26 — Curv (United States): $30 million

Internet Software & Services (Category: Custody & Wallet Services)

27 — Symbiont (United States): $29 million

Internet Software & Services (Category: Capital Markets)

28 — SFOX (United States): $24 million

Internet Software & Services (Category: Exchanges)

29 — AlphaPoint (United States): $23 million

Internet Software & Services (Category: Infrastructure & Development)

30 — Nivaura (United Kingdom): $20 million

Internet Software & Services (Category: Capital Markets)

31 — CipherTrace (United States): $18 million

Internet Software & Services (Category: Blockchain Analytics)

32 — ConsenSys (United States): $18 million

Internet Software & Services (Category: Infrastructure & Development)

33 — Metaco (Switzerland): $17 million

Asset & Financial Management & Trading Software (Category: Custody & Wallet Services)

34 — TradeIX (Ireland): $16 million

Internet Software & Services (Category: Trade Finance)

35 — Data Gumbo (United States): $16 million

Internet Software & Services (Category: Data Provenance)

36 — Alchemy (United States): $15 million

Internet Software & Services (Category: Infrastructure & Development)

37 — Clearmatics (United Kingdom): $12 million

Compliance (Category: Capital Markets)

38 — QEDIT (Israel): $10 million

Internet Software & Services (Category: Data Provenance)

39 — GuardTime (Switzerland): $8 million

Data & Document Management Software (Category: Data Provenance)

40 — Coin Metrics (United States): $8 million

Internet Software & Services (Category: Blockchain Analytics)

41 — Tokeny Solutions (Luxembourg): $6 million

Internet Software & Services (Category: Capital Markets)

42 — Prime Trust (United States): $5 million

Internet Software & Services (Category: Infrastructure & Development)

43 — MonetaGo (United States): $5 million

IT Services (Category: Data Provenance)

44 — Coinfirm (United Kingdom): $5 million

Internet Software & Services (Category: Blockchain Analytics)

45 — Dltledgers (Singapore): $3 million

Internet Software & Services (Category: Trade Finance)

46 — SENTBE (South Korea): $2 million

Internet Software & Services (Category: Consumer Wallets)

47 — Binance (Undisclosed Location): N/A

E-Commerce (Category: Exchanges)

48 — Digital Currency Group (United States): N/A

Asset & Financial Management & Trading Software (Category: Digital Asset Services)

49 — Gemini (United States): N/A

Internet Software & Services (Category: Exchanges)

50 — The TIE (United States): N/A

Internet Software & Services (Category: Blockchain Analytics)

Photo by Hitesh Choudhary on Unsplash

Analysis

Funding

There is significant venture capital going into the blockchain market today, as evidenced in the financing numbers CB Insights put together for the Blockchain 50 firms. In total, they detailed the investment firms backing 47 of the 50 companies (3 were unavailable), and collectively, as of December 2020, these firms had been backed by venture capital to the tune of $3.487 billion. Some of the significant findings from analyzing the financing of the Blockchain 50 include:

The company that heads the list, Coinbase, has secured over half a billion ($539 million) dollars in funding to date;

The top two firms in funding, Coinbase and Bakkt, both U.S.-based enterprises, have received over a billion dollars in private equity funding between them;

While Bitmain Technologies is the only Chinese company present among the top 50 blockchain firms, it is the third largest in terms of venture capital interest, having received $450 in backing to date; and

A total of 9 firms have received in excess of $100 million in private equity investment to date.

All of the companies are presently privately held, but there should be significant IPO interest as these enter the market (more on that later).

Photo by NASA on Unsplash

Nationality

One of the truly amazing things about the blockchain market today is the truly global nature of this emerging technology. In analyzing the Blockchain 50, as can be seen in Table 2 (Location of the Blockchain 50) below, the predominance of the largest blockchain firms are today American — 30 out of 50. However, the remainder of the firms are dispersed throughout Europe and Asia, without a strong China presence to date. In fact, China only has one company on this initial Blockchain 50 ranking.

Table 2 — Location of the Blockchain 50

United States: 30

United Kingdom: 4

Switzerland: 4

China: 1

Netherlands: 1

Ireland: 1

France: 1

Germany: 1

Austria: 1

Luxembourg: 1

Israel: 1

Singapore: 1

South Korea: 1

Taiwan: 1

Undisclosed Location: 1

And yes, you did read that right. Unlike the Fortune 500 or probably any other business list one could find today, the Blockchain 50 actually has one firm (Binance) that is listed as having an undisclosed location. Such is this still cryptic and emerging technology market today!

Photo by André François McKenzie on Unsplash

Lines of Business

The breadth of the blockchain market today can be seen in the types of firms that are included in the Blockchain 50 list. CB Insights broke down the companies both by the general business sector they were engaged in and by their specific line of business in the market. As can be seen in Figure 2 (Blockchain 50 by Sector), the firms comprising the top 50 companies in the emerging blockchain market today are predominantly classified — two-thirds of them in fact — as operating in the “Internet Software & Services” area. The remainder are categorized into a variety of sectors, including both software, hardware, and services — both for consumers and businesses — relating to the blockchain.

Figure 2: Blockchain 50 by Sector

The diversity of services offered by firms in the fast-emerging industry can be seen in Figure 3 (Blockchain 50 by Categories) below, as within the general blockchain space there are a whole range of subspaces in which firms are innovating and competing today. In this initial Blockchain 50 ranking, companies categorized as operating in custody and wallet services and blockchain infrastructure and development were the most common classifications, closely followed by firms engaged in using blockchain for capital markets and exchanges and providing blockchain analytics. Taken together, the diversity of approaches taken by companies in the market shows just how broad the interest and experimentation in making use of blockchain technologies for everything from investments to payments to asset management to analytics to assuring provenance of anything is all around the world today.

Figure 3: Blockchain 50 by Categories

The Future

What does the future hold for these 50 innovative blockchain companies? Individually of course, that is hard to say. As with any emerging technology, there will always be winners and losers, those who guessed right on the technology curve and those who didn’t. There will be those who will be able to manage their growth well and those who don’t. There will be acquisitions and absorptions by larger companies and consolidations of rivals. However, with an innovative technology such as this, it is not out of the question that 1, 2, 3… or more of these firms will evolve to be leaders in their respective areas of the blockchain. And which of the sectors of the overall blockchain market will be the most critical for consumers and businesses will only emerge over time as well.

Photo by Terry on Unsplash

Is there the “Google” of the blockchain among these companies on the initial Blockchain 50 ranking? Only time will tell. However, what is certain is that these will certainly be companies to watch over the next few years, and as some do choose to go public, their IPO’s (initial public offerings) should draw significant investor attention due to their emergence in this emerging — and important — area of technology today. And yes, file this initial Blockchain 50 list away, as with the rapid growth of this technology, this list — and the innovative companies on it — might produce some real winners in the near future and help propel the overall blockchain market. In short, stay tuned and buckle up, as it looks to be quite a fascinating ride!