2016 Will See the Emergence of Five Blockchain Unicorns ($1 Billion Evaluation) Says Magister Advisors

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Next year will see the emergence of at least five Bitcoin and Blockchain businesses with a valuation of more than USD$1 billion. The difference is that these businesses will be able to justify their valuations. This is one of the findings of Magister Advisors‘ survey of the views of the World’s leading Bitcoin and Blockchain businesses, carried out in Q4 2015.

Unicorn refers to startups reaching a $1 billion valuation while still privately held, which not long ago was a rarity.  

Jeremy Millar, partner at Magister Advisors, M&A advisors to the technology industry, who led the research said:

“Globally, financial services companies spend close to half a trillion dollars on IT. This is the territory of thoroughbreds and workhorses, not Unicorns. We will see multiple companies raising $100m+ rounds and $1bn+ valuations in 2016. These valuations will be built on the opportunity of selling products and services into the largest and most profitable industry in the world, not on subsidising consumer services to drive adoption or building audiences to monetise with advertising. These new companies will have real lasting value; they’re not creatures from a fairy tale that will fade away when their valuations, which are based, appropriately enough, on leaps of the imagination, drop.’

Millar added:

“Goldman Sachs have put their mighty weight and considerable market influence to work with SETLcoin. This is an interesting development, as to date the announcements from large financial institutions have been focused on collaboration with technology providers and consortiums. It’s not surprising to see Goldmans push for leadership – it is really modus operandi for the firm.”

“We also expect to see an array of new blockchain-based platforms, creating the underlying technology to address a set of specific issues in financial services that a ripe for profitable improvement.”

Leon Pick writes from Finance Magnates:

Bitcoin wallet and merchant services provider Coinbase was envisioned by some to become the crypto industry’s first unicorn. It has secured $106.7 million in funding to date, the second highest in the industry. However, one may question if its revenue model is strong enough to warrant such a valuation. Coinbase’s total revenues from its bitcoin brokerage and merchant services are miniscule.

Coinbase’s exchange, launched earlier this year, may be a better source of revenue. It is currently supporting volumes of about 250,000 BTC per month. Assuming an average bitcoin price of $350 and a 0.25% commission for market takers, this translates into annual revenues of roughly $2.6 million, which does not warrant a $1 billion valuation.

The revenue models for several other crypto startups, including big names like Xapo and Circle, can also be called into question, and the coming year or two may be game changers.

About Richard Kastelein

Founder, Publisher and Editor in Chief of industry leading online publication, Blockchain News and co-founder and director at Blockchain Partners in London/Amsterdam/NYC. Kastelein is also an advisor with a number Blockchain startups doing ICOs including Humaniq.co where hs is interim CMO, DECENT.ch, Inchain, Chronobank, eGaas and others. He is regarded as one of the top journalists by the Blockchain and fintech communities – as is evident by his entry in the Top 150 Fintech journalists online and in the top 10 of the Blockchain Top 100 List.

As a prominent keynote presenter, he has spoken on Blockchain at events in Gdansk, Amsterdam, Minsk, Dubai, Antwerp, Eindhoven, Bucharest, Nairobi, Tel Aviv, Manchester, Brussels, Barcelona etc, where he helped spread the cause for Blockchain technology and cryptocurrency and, consequently, has built a notable network in the scene.

He’s also a director of a Dutch foundation called The Hackitarians and has run innovation events in London, San Francisco, Berlin, Amsterdam and other cities around the world on topics such Blockchain, Health, Energy, Internet of Things, AI etc.

In 2013, the European Commission appointed him as an expert for overseeing financing for emerging startups as a part of the European Commission’s 90 billion euro Horizon 2020 project, created in Brussels to promote innovation as a driving force of job creation and business ventures across Europe. He has also worked as an external expert for Innovate UK since 2012, judging startups for the UK government.

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