Crypto Fundraising And M&A Took A Dive In 2019: PwC Report

A new report by the leading auditing company PwC shows that crypto fundraising was one of the industries which took a dive last year. It appears that both M&A and funding deal flow in the industry dropped, according to the report released today by PwC Global.

On the M&A side, the crypto native acquirers took 58% of the deal flow, compared to the 42% in 2018. The cryptonews also show that the total number of M&A deals dropped from 189 in 2018 to 114 in 2019, while the overall value of these deals dropped by 79% from $1.9 billion to $451 million.

Crypto fundraising was another sector that saw drops. Larger companies were basically able to eat up the ones that provided services that were ancillary to their own. This is what the PwC Global crypto lead Henri Arslanian told the media in an interview. As he said:

“I think we should expect some of the big players to get bigger, but not by buying direct competitors. Not by becoming vertically bigger but by becoming horizontally bigger. Unicorns are becoming more like octopuses where they have their hands in various areas of the crypto ecosystem.”

Meanwhile, the declines in crypto fundraising were not quite as stark. The post-seed rounds took up 8% more of overall fundraising deals in 2019, which is a clear sign of how the sector matured.

“I think that’s something we should expect to see as well, as the industry matures, there will be enough deal flow and there will be enough exits as well to allow many of the crypto VCs to be successful,” Arslanian said.

However, the Bitcoin and altcoin news still show that crypto fundraising decreased by 40% overall – going to $2.24 billion and the number of deals dropped to 122. Equity fundraising decreased by less, showing a 18% drop. The rise of Bitcoin in the second and third quarter of 2019 did not stave off the funding drop.

As such, the industry should assume going into 2020 with the thought that the global economic downturn will further affect funding deals.