Morning Report: Magical Internet ICO-Whatevers Surpass Normal Early-Stage Funding

Morning Report: ICO’s hot run pushes their raised sums above traditional early-stage funding this year.

Remember ICOs? The funding vehicles allow crypto-projects to raise huge sums of liquid cryptocurrency to fund the creation of new crypto tokens, currencies, and assets. Give me some ethereum or bitcoin today, and you can buy into the next winner, in hopes of future use, sure, but also rapid appreciation in value.

Wish you could get into bitcoin years ago? ICOs give the rabidly speculative the chance to get into what might be next.

And ICOs are big business. According to a recent CNBC report, sums raised by ICOs have “surpassed early stage venture capital (VC) funding for internet companies for the past two months.” Goldman Sachs may have been first to note the shift, which is backed up by data sourced from Coinschedule, an ICO database.

Here’s the chart that is circulating around the nerdier sides of the financial internet:

From March to June, ICO-land went absolutely bonkers.

Not to be rude, but here’s what I think: Funding ICOs that are little more than white papers with millions or more is insane. Projects that couldn’t get a meeting with a traditional venture kid are raising hilarious amounts of liquid money with no product.

Sure, a lot of this is likely just crypto enthusiasts plowing paper gains from the early-2017 ethereum gains into new gambles, but that doesn’t really excuse the behavior.

The current-cycle habit of chasing increasingly large amounts of short-term risk for above-market gains continues, in other words. To make that point, let’s quote from a recent New York Times piece that sports the following, annoying headline: “Grandpa Had a Pension. This Generation Has Cryptocurrency:”

Magical internet money, indeed.

From the Crunchbase Daily:

Flipkart raises massive SoftBank round

• E-commerce marketplace Flipkart has closed a SoftBank-backed funding round that it described as the largest-ever private investment in an Indian technology company. The SoftBank Vision Fund is investing $2.5 billion, according to a Bloomberg report citing unnamed sources, capping off a record-setting funding spree.

AI acquisitions hit peak

• In 2017, an average of nine AI startups have been acquired every month, the fastest recorded pace, a Crunchbase News analysis finds. Google, Apple and Microsoft rank as the most active buyers of AI startups.

Game developer Plarium sold for $500M

• Australian gaming technology company Aristrocrat has acquired game developer Plarium for $500 million. Israel-based Plarium offers a roster of games but is best known for developing Vikings: War of Clans.
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