Let’s put our emotions aside for the duration of this article to observe how public companies behave with regard to blockchain technology through the prism of investment. To do this, let’s look at the biggest financing rounds made by public companies. As shown in the graph below, Alphabet ($1,506m in 4 rounds), BlackRock ($1,171m in 3 rounds), Morgan Stanley ($1.10m in 2 rounds), Samsung ($979m in 13 rounds), Goldman Sachs ($698m in 5 rounds, BNY Mellon ($690 million in 3 rounds) and PayPal ($650 million in 4 rounds) are the top investors in the Blockchain sphere.
Blockchain investments of public companies (September 2021 – June 2022)
Alphabet therefore exceeds the investments of BlackRock, the largest fund manager in the world, in blockchain initiatives. But that’s no surprise. Earlier this year, Sundar Pichai, the CEO of Alphabet (parent company of Google and Youtube), publicly declared that he “definitely looks at blockchain” calling it “an interesting and powerful technology with wide applications”. Concretely, Pichai had told financial analysts, following the publication of Q4 2021 quarterly results, to seek to integrate blockchain solutions in its successful services including Youtube, Google Maps and in various activities to feed the IT layers. For example, Alphabet’s cloud team, which competes with Amazon Web Services and Microsoft Azure, seeks to “support customer needs through platforms based on blockchain technology.”
“Anytime there is innovation, I find it exciting, and I think it’s something we want to support as best we can,” Pichai said in February 2022. “The web has always evolved, and it will continue to evolve, and as Google we have benefited immensely from open source technologies, so we plan to contribute to that.”
No wonder then that a tech giant like Alphabet finds itself in the biggest funding rounds between September 2021 and June 2022. We can also see the participation of many banks. An exploration and focus on bank investment in the crypto-blockchain sphere in my recent article: the biggest banks are succumbing to the blockchain
But then in what types of companies do these stock market giants invest?
The most popular companies:
Five companies that offer cryptocurrency custody and blockchain infrastructure solutions have reached significant agreements:
- Fireblocks (550 million dollar deal involving Alphabet)
- Circle ($550 million round with participation from BlackRock)
- ConsenSys secured one of the highest funding amounts (a $450 million deal involving Microsoft) during the period analyzed.
- Anchorage Digital (350 million dollar agreement involving PayPal and BlackRock).
- Talosanother emerging digital asset and crypto-trading infrastructure provider, has caught the eye of Wells Fargo Strategic Capital, BNY Mellon, PayPal and Citi Ventures. Talos has become particularly popular among banks due to its plans to extend centralized crypto trading support to decentralized finance (DeFi) platforms.
We are also seeing significant investment in crypto data providers like Corner Metrics supported by Goldman Sachs and BNY Mellon or even entities that aim to secure blockchain infrastructures against fraud and illicit transactions such as Certik.
It should also be noted that companies such as Samsung and Microsoft mainly invest in technological entities offering solutions and services associated with the custody and exchange of non-fungible tokens (NFTs). Companies that are therefore focused in sectors such as games, art, entertainment and more generally in the development of the metaverse. These two companies monopolize the ranking of companies having filed the most patents related to the metaverse. By clicking on the following link, find it: ranking of the companies that have filed the largest number of patents related to the metaverse domain over the past five years.
Ultimately, although blockchain technology is torn from all sides between those who see it only advantages and those who see only disadvantages, a good number of public companies have had a heavy hand to support companies that rely on this technology. Still little understood, the blockchain remains, quite logically out of mistrust, experienced by only a very small portion of the population and this is the characteristic of any emerging technology. In the meantime, the aforementioned companies may or may not have had the flair to invest in pioneering players in the crypto-blockchain ecosystem. Were they right? Or were they wrong? We will return in a few months/years to take stock of these investments on Zonebourse.
I will end this paper by quoting the famous American author and theorist Peter Drucker: “Systematic innovation requires the willingness to see change as an opportunity”.