November 30, 2017
Alex Wilhelm is the Editor in Chief of Crunchbase News, covering the intersection of startups and money.

Morning Report: Cryptos are booming but ICOs look weak. What’s going on?

In recent days, the aggregate value of crypto assets — currencies, tokens, and the like — spiked to over $300 billion before retreating. Given that massive boom in value and consumer interest in bitcoin, ether, and other popular crypto products, you might presume that the ICO market must also be booming.

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It’s not. An ICO, or initial coin offering, is a method through which entrepreneurs collect liquid cryptos and regular currency in exchange for new tokens on often yet-to-be-built networks that will apply blockchain tech to something new, like bodega cats, or false teeth.

(General 2017 maxim: If you can put the word in front of “blockchain,” it must be better with blockchain. Trust me; I read the white paper.)

According to CoinSchedule, completed ICOs in November are down sharply from preceding months. I expect the November result to perk up at least some, but this isn’t much to work with:

To be clear, ICOs are not over. While there is a lot of crypto paper gains to be spent, those owners will be on the hunt for the next big return. After all, if you just enjoyed the crypto bull market of 2017, you aren’t going to turn around and be content to collect pedestrian returns from slow-moving things like “stocks” or “bonds” or “general asset diversification for the mitigation of short-term risk while allowing for long-term growth.”

Of course not.

So as long as there are new things to blockchain, the ICO market will rub along somehow. Perhaps in the stunted form that we see above.

All this is to say that the boom in the value of the most popular blockchains and tokens (bitcoin, ethereum, et al.) isn’t dragging the ICO market up with it—at least right now. That might prevent a few people from losing their shirts.

From The Crunchbase Daily:

VR and AR funding rebounds

Consumer uptake of virtual and augmented reality may be slower than boosters hoped, but venture investment hasn’t slackened. After a slow start in the first quarter, funding for VR and AR startups in 2017 is now roughly on par with 2016 levels, a Crunchbase News analysis finds. Exits are also picking up a bit.

Y Combinator seeks $1B for new fund

Sources say Silicon Valley startup accelerator Y Combinator is raising up to $1 billion for a new venture fund, Axios reports. The planned fund would be YC’s second Continuity Fund, the first of which was a $700 million vehicle for backing follow-on rounds of companies it incubated. However, the new fund would reportedly be for both early and later-stage deals.

Uptake raises $117M for industry analytics

Uptake, a provider of predictive analytics technology for industrial companies, has raised $117 million in a Series D funding round led by Baillie Gifford and joined by Revolution Growth and GreatPoint Ventures. The new financing values Chicago-based Uptake at $2.3 billion.

iStockPhoto / Jane_Kelly