Following the Money: Geographic Dispersion of VC Bitcoin Investment

The world’s first decentralized currency features a relatively decentralized geographic investment footprint.

AccessTimeIconFeb 24, 2014 at 4:02 p.m. UTC
Updated Feb 9, 2023 at 1:23 p.m. UTC
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CoinDesk releases its 'State of Bitcoin 2014' report tomorrow. Here we have the second part of a two-part series, which features an exclusive look at some of the data from the report.

This article examines the geographic dispersion of VC investment in Bitcoin companies to date.

Note: As with yesterday's article the below analysis is drawn solely from publicly disclosed venture capital investments.

Relatively large number of VC-backed Bitcoin companies are based outside North America

The world’s first decentralized currency features a relatively decentralized geographic investment footprint, with 40% of all VC-backed Bitcoin companies based outside North America (Chart 1).

Chart 1: Regional Comparison - Number of VC-backed Bitcoin Companies


It is also interesting to note that Asia, with nine Bitcoin companies, has a sizable lead in terms of its total number of venture-backed VC companies as compared to Europe, which is home to just three companies.

While Asia and Europe together roughly equal the total number of Bitcoin companies housed in North America, the lion’s share of VC dollars (81%) to date have been invested in North American companies (Chart 2).

Chart 2: Regional Comparison - VC $s Invested in Bitcoin Companies


Table 1: Regional Comparison - VC-backed Bitcoin Companies

RegionsValue ($m)No. of companiesAvg./Region
North America78.6184.4

US-based Bitcoin companies in particular have received the vast majority of funding, with 70% of the total venture dollars invested, followed by Canada at 11% and China in third place with 8% of total funding (Chart 3).

Chart 3: Country Comparison - VC $s Invested in Bitcoin Companies


The United States is home to 16 of the 30 VC-backed Bitcoin companies (53%), with China in a distant second place with just three VC-backed Bitcoin companies (10%) (see Table 2).

Table 2: Country Comparison - VC-backed Bitcoin Companies

CountriesValue ($m)No. of companiesAvg./Country ($m)
South Korea0.820.4
United Kingdom5.022.5
United States68.1164.3

Vast majority of VC-backed Bitcoin companies are based outside Silicon Valley

One of the questions which has arisen over the last year is whether Bitcoin startups will be geographically decentralized or concentrate in a particular tech hub, such as Silicon Valley?

Chart 4: Silicon Valley vs Rest of the World: Number of VC-backed Bitcoin Companies


So far just a little over one-quarter of all VC-backed Bitcoin companies reside in Silicon Valley (Chart 4).

While this figure would seem to suggest that the Valley has not yet secured its place as a dominant location for Bitcoin startups, when we examine the dispersion of VC dollars invested to date the picture is less clear.

Chart 5: Silicon Valley vs Rest of the World - VC $s Invested in Bitcoin Companies

Silicon-Valley-vs-Rest-of-the-World-VC$s-Invested-Bitcoin Companies
Silicon-Valley-vs-Rest-of-the-World-VC$s-Invested-Bitcoin Companies

When we look at the dispersion of venture investment we see that Silicon Valley-based Bitcoin firms have received over a half of the total venture investment in Bitcoin ecosystem companies to date (Chart 5).

This imbalance between the relatively small number of companies located in Silicon Valley and its much larger share of the total investment pie can largely be attributed to a single San Francisco-based company, Coinbase, which by itself has received over $31 million in two venture rounds in 2013.

The amount of money Coinbase has raised also represents just under one-third of the total publicly disclosed investment in Bitcoin companies to date.

Table 3: Four Largest VC-backed Bitcoin Companies

CompanyClassificationTotal Funding ($m)*Headquartered
CoinbasePayment Processor31.1San Francisco
BitAccessFinancial Services10.0Ottawa
Ripple LabsFinancial Services9.0San Francisco
Circle Internet FinancialUnknown9.0Boston

*Note: figures only reflect publicly disclosed total funding received to date.


One of the key catalysts propelling Bitcoin’s momentum in the past year has been the substantial financial investment made by the venture capital community in Bitcoin and its surrounding ecosystem.

Much of the attention has been focused on the actual size of investment, with significant discussion generated by the $9m invested in Jeremy Allaire's still-wrapped-in-mystery startup, Circle, and Coinbase’s subsequent $25m Series B round.

While it’s true that money provides Bitcoin startups with the funds necessary to launch products and services which will increase adoption, the contributions which VCs can make to Bitcoin beyond simply providing deep pockets should not be underestimated.

For example, over the last several decades Silicon Valley has worked hard to establish relationships in government, and these regulatory relationships may play an even more important role in shaping Bitcoin's prospects than future rounds of funding.

Many venture capitalists have also established a strong voice in the public discourse on topics such as how to generate additional economic growth. Politicians and regulators in areas struggling to create new jobs should perhaps tread carefully as they explore regulating what many believe is one of the biggest technological opportunities since the Internet.

There is also the feeling by many that, in certain corners of the ecosystem, Bitcoin could benefit from some additional 'adult supervision' of venture capitalists.

Overall, given the combined resources, relationships and influence which venture capitalists possess, no other alternative currency in history has benefitted from the same level of institutional support as that enjoyed by Bitcoin.

We'll be publishing our 'State of Bitcoin 2014' report tomorrow, make sure you don't miss it!

All source data used in this and yesteray's article can be downloaded in the following files: Google Docs / .csv


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