An in-depth report on the DLT-based companies of Berlin
Following the successful launch
Berlin, in particular, has the highest number of DLT-based companies. And since part of the Occurrency team is headquartered in Berlin, we thought it would be best to begin our research with the city we knew inside out. And that’s exactly what we did.
With 50+ Blockchain startups founded between 2017 and 2018 and 30+ international investors and VC companies investing in the space, we spotted the city of Berlin to be a safe haven for early-stage entrepreneurs eager to get into Blockchain.
The story of a hundred blockchain companies
In the initial stages of our research, we found 102 companies in Berlin were tackling at least one form of DLT-based technology. To our surprise, after digging a little deeper 10 of the companies we tried to contact had relocated to a different jurisdiction, whereas 7 companies ceased all operations for reasons that remain unknown.
Occurrency dedicated 6 months to interview CEOs, founders, marketers, and PR people to learn about their business models & unique value proposition but also about their pain points when working with DLT technologies. Following a thorough analysis we were left with 85 active DLT-based companies; each with its own strategy and methodology to break through a rather new and challenging industry. The complete list can be viewed in our report.
Berlin’s DLT-based companies in numbers
Between 2015 and 2018, Berlin’s DLT-based companies, including DLTs that had an ICO, raised a total of 517.8M EUR. With over 700 tech companies active in industries like FinTech, Big Data, and Artificial Intelligence, software development is one of the top industries being disrupted by at least one type of distributed ledger technology.
In terms of numbers, 40 of the 85 companies researched by Occurrency didn’t get any form of investment since inception. This could only mean that they’re bootstrapped or self-funded. Following the updated edition of our “Who’s who in blockchain in Berlin” this December, we will have a second look at our list of companies. The purpose will be to analyze their progress and assess what they’ve done with the money raised, and whether or not they’ve launched/improved upon their product, got more customers, etc.
To ICO or to not ICO? That is the question
After launching a startup, it’s only logical for the average entrepreneur is to seek investment. Following the materialization of blockchain as a type of DLT, in 2015 a 5th type of funding took the industry by storm: the Initial Coin Offering (ICO). At the time of writing, of the 85 companies researched by Occurrency, 31 DLT-based companies had an ICO (2015-2018), have an ongoing ICO (2018-2019), or are planning an ICO (2019). Since inception, of the 85 companies, 19 DLTs with an ICO raised a total of 366.6M EUR as opposed to 151.2M EUR raised by the 18 DLTs without an ICO.
According to Bitcoin.com, more than 80% of ICOs never list their tokens on an exchange. Whether the tokens are ERC-20 or not, behind every token there has to be a business model that can either build value or not with the help of the community. Although the importance of proper communication and security best practices cannot be understated, another fundamental factor plays an ongoing role in the success of a company post ICO is the health of its legal strategy.
The rising trend of STOs
Security Token Offerings definitely represent a new era of financing for the blockchain industry. There is an air of controversy surrounding this type of fundraising, as it can help institutional investors and governments have more influence over the project’s inception. On another hand however, they do help weed out fraudulent or illegitimate blockchain projects which could have a positive impact on the industry in the long-term.
Blockchain in the corporate world in Berlin
Increasingly more corporates in Berlin are opening up to blockchain technology. Companies like Volkswagen, Porsche, BMW, Telekom, and Allianz are considering to integrate DLTs into their business model.
In an interview with
“All companies will one day use blockchain technology. At T-Labs we beganour deep dive into blockchain in 2017, at first reading then quickly moving into interviewing and hearing pitches from start ups. Within months we were researching and developing with blockchain, quickly gaining expertise in the domain and moving towards minimal viable products (MVPs).”
The appended edition of this report – to be released in 12 months – will take another look at the exact same companies; the purpose being to re-evaluate their progress and promises made, either mentioned in their roadmap or on their official social channels. We strongly believe that, in order for a report to be valuable to consultants, investors, lawyers, policymakers or simply anyone looking to understand more on the blockchain scene, it has to look at things in a dynamic way, over time. We aim to replicate our effort in the upcoming months to Switzerland.