Blockchain Leads Information Security Startup Investments

By Philip Maina

2 days agoSun Feb 25 2024 08:56:35

Blockchain-Leads-Information-Security-Startup-Investments

Reading Time: 2 minutes

  • New research shows that blockchain is among the top recipients of investments among information security startups
  • Other top contenders include startups in the artificial intelligence sector
  • Researchers also observed that investments in the blockchain sector are likely to yield profits of over 170%

Researchers funded by Switzerland’s Cyber-Defense Campus have disclosed that investors in the information security sector have been pouring notable amounts of money into blockchain-focused startups. The researchers noted that startups in the blockchain sector are likely to grow investors’ profits by over 170% which is “consistent with the performance of cryptocurrencies over the sample period.” Other startups receiving considerable investor attention include those focussing on artificial intelligence (AI), something that’s consistent with the growing interest in AI-powered products.

$27 Billion Invested in Blockchain Startups

The researchers disclosed that they relied on information from Crunchbase and employed a “machine learning approach” to fill any gaps in Crunchbase’s data. The report indicated that investors had poured $27 billion into blockchain-based projects between 2010 and 2022.

Although AI, security and machine learning-focused startups received more funds than their blockchain counterparts, they lagged in the projected return on investment (ROI).

According to the report, investments in the blockchain space are likely to give an annual arithmetic return (AAR) and log return “at 177.27% and 105.42%, respectively.” Investments in AI come second with an AAR of 67.25%.

The report, however, indicated that the high ROI from the blockchain space is “likely driven by investors’ interest in cryptocurrency.”

Investigating Origins of Life Using Blockchain

The report comes when blockchain technology is finding more use cases in different fields. Last month, for example, it was used to investigate the origins of life. Countries like Belgium and traditional firms like the London Stock Exchange Group are also embracing the technology for various uses.

With the cryptocurrency market recovering from the prolonged bear market and with blockchain investments driven by investors’ interest in crypto, investments in blockchain-based startups will likely continue to rise.