Why Google Invested $1.5 Billion in Crypto-Focused Companies

According to a report from research firm Blockdata, Google’s parent company has actively invested in the crypto space. The big tech giant and other big companies in the legacy financial system have invested over $6 billion in digital asset companies from September 2021 to June 2022.

The report claims that Google, Samsung, BlackRock and other companies are investing in projects and products with the potential to improve their own offerings. The companies therefore invest in special use cases apparently with the aim of integrating them into their business models.

The report claims that the amount invested by Alphabet and other companies is difficult to track. The money flows via private financing rounds and other investment mechanisms. However, they used other methods to come up with approximates:

(…) we cannot determine how much money these companies have invested, as they participate in financing rounds with several or many other investors. As a proxy for this, we can look at the total funding amounts for the rounds they participated in.

The report used data from CB Insights to get a pulse on the companies backed by these majors. The report claims the following about the total number of companies that received funding from Google, BlackRock, Samsung, Goldman Sachs and other financial giants:

The 40 companies invested approximately $6 billion in blockchain startups between September 2021 and June 2022. Because some rounds involve the participation of multiple investors, it is unclear how much each company invested in a project.

As shown below, Alphabet has invested in Fireblocks, Dapper Labs, Vultage and Digital Currency Group. Only the latter company has one of the largest portfolios in the area with companies such as Grayscale, Abra, Genesis, BitPay and others.

What are the most requested crypto use cases?

As the images show, companies are securing their positions in the crypto industry by investing across multiple sectors. As mentioned, Samsung has diversified its portfolio with a particular interest in non-fungible tokens, and Metaverse with a capital injection into Yuga Labs (Bored Ape Yacht Club) and Sky Mavis (Axie Infinity).

In that sense, the report showed that NFTs and digital assets focused on supporting gaming services and marketplaces were one of the most sought-after use cases. Other popular applications were infrastructure providers, blockchain development platforms, and blockchain services. The report added:

Alphabet and Blackrock show a completely different strategy by making concentrated bets on a smaller set of companies (…). Banks have started to increase their exposure to crypto and blockchain services (some more than others) given increased customer demand. This has led to them making investments in crypto custody, asset management and trading.

Another company that saw a lot of attention from mega-corporations was TRM Labs. A compliance firm integrated into Aave, Uniswap and other Ethereum protocols to provide them with an “address screening” feature that can block certain entities from accessing their platforms.

At the time of writing, Ethereum (ETH) is trading at $23,400 with a loss of 2% in the last 24 hours.