Let’s put our emotions aside for the duration of this article to observe how public companies deal with blockchain technology through the prism of investment. To do that, let’s look at the largest 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 ($690m) in 3 rounds) ) and PayPal ($650 million in 4 rounds) are the top investors in the blockchain sphere.
Blockchain Investments by Public Companies (September 2021 – June 2022)
Alphabet therefore surpassed the world’s largest fund manager BlackRock’s investment in the blockchain venture. But it is not surprising. Earlier this year, Sundar Pichai, CEO of Alphabet (the parent company of Google and Youtube), publicly announced that he “definitely looks at blockchain,” calling it “an interesting and powerful technology with broad applications.” Ultimately, Pichai told financial analysts, after releasing Q4 2021 quarterly results, to integrate blockchain solutions into its successful services, including YouTube, Google Maps, and across operations to feed IT layers. For example, Alphabet’s cloud team, which competes with Amazon Web Services and Microsoft Azure, seeks to “support customer needs through a platform based on blockchain technology.”
“Anytime there’s innovation, I think it’s exciting, and I think it’s something we want to support as much as possible,” Pichai said in February 2022. “The web has always evolved, and it will continue to evolve, and as Google we’ve benefited greatly from open source technologies, so we plan to contribute to that.”
No wonder then that a tech giant like Alphabet finds itself in the largest funding round between September 2021 and June 2022. We also see many banks participating. An exploration and focus on bank investments in the crypto-blockchain sphere in my recent article: The biggest banks are succumbing to blockchain
But then what kind of companies do these stock market giants invest in?
Most Popular Companies:
Five companies that provide cryptocurrency custody and blockchain infrastructure solutions have reached significant agreements:
- Fireblock (550 million dollar deal involving Alphabet)
- the circle ($550 million round with participation from BlackRock)
- Consensus One of the highest funding amounts secured during the analyzed period (a $450 million contract involving Microsoft).
- Anchorage Digital (The $350 million deal involving PayPal and BlackRock).
- TalosAnother emerging digital asset and crypto-trading infrastructure provider, has caught the eye Wells Fargo Strategic Capital, BNY Melon, PayPal and Citi Ventures. Talos has become particularly popular among banks due to its plans to expand centralized crypto trading support to decentralized finance (DeFi) platforms.
We are also seeing significant investment from crypto data providers Corner metrics Backed by Goldman Sachs and BNY Mellon or even entities that aim to secure blockchain infrastructure against fraud and illegal transactions e.g. Sertic.
It should also be noted that companies like Samsung and Microsoft mainly invest in technology entities that provide solutions and services related to the custody and exchange of Non-Fungible Tokens (NFTs). Companies that therefore focus on sectors such as games, art, entertainment and more generally the development of the metaverse. These two companies monopolize the ranking of companies with the most patent filings related to the Metaverse. Find it by clicking on the following link: Ranking of companies with the highest number of patent filings related to metaverse domains in the last five years.
Ultimately, although blockchain technology is torn between those who only see the benefits and those who only see the disadvantages, a good number of public companies have a heavy hand in supporting companies that rely on this technology. Still little understood, blockchain remains, logically beyond belief, experienced by only a very small portion of the population and is characteristic of any emerging technology. Meanwhile, there may or may not be companies mentioned above to invest in pioneering players in the crypto-blockchain ecosystem. Were they right? Or were they wrong? We will be back in a few months/years to take this investment stock on Zonebourse.
I will conclude this paper by quoting the famous American writer and theorist Peter Drucker: “Procedural innovation requires a willingness to see change as an opportunity”.