Venture capitalists don't appear to be sold on the technology underlying bitcoin

Mark Lennihan/AP

People attend the 2014 Inside Bitcoins conference in New York.

• Blockchain, the technology behind bitcoin, is getting a lot of attention, but that's not necessarily translating into money from investors.
• Only two of the blockchain investments in the last year were over $100 million, according to a Goldman Sachs report.
• One of the top 10 investments didn't even come from venture capital - it came from a crowdsourced funding technique called an initial coin offering.

Despite a lot of hype, the blockchain technology business is still a nascent industry - particularly when it comes to venture capital investments.

The blockchain is the technology underlying bitcoin and other cryptocurrencies, which records each and every transaction made using them on a virtual ledger.

Although many see blockchain technology as a revolutionary innovation with a wide range of potential applications, globally only two blockchain startups raised $100 million during the 12 months that ended on September 30, according to a Goldman Sachs equity research report published Tuesday. One hundred million dollars is a relatively small amount when it comes to venture investments these days.

Another sign of venture investors' seemingly tepid interest in blockchain technology: One of the companies that ranked in the top 10 among blockchain startups that raised the most money during that period didn't even get its money through venture investment.

Instead, Brave Software raised $35 million in 30 seconds through an initial coin offering (ICO), which is a crowdsourced token sale in which companies issue new currencies that can only be used within their networks. Brave offers a web browser that blocks ads, but pays websites for their content using a cryptocurrency.

Blockchain technology is gaining popularity as large enterprises and startups alike see a growing market for a range of applications beyond cryptocurrencies, including documenting legal contracts and tracking shipments. Both IBM and Oracle have announced commercial offerings of blockchain-related services this year.

In its report, Goldman Sachs classifies blockchain technology as being in Stage 1 of the investment cycle. That's an early stage, which is typically marked by rapid growth in the number of deals and the amounts invested.

But at this point investments in blockchain technology are still relatively small compared to other areas within the broader financial technology industry and are growing more slowly. The total amount invested in blockchain startups during the year that ended on September 30 grew by just 45% compared with the same period a year earlier. By contrast, the total amount invested in startups focusing on billing, expense management, and procurement grew by 165% over the same time period.

Overall, venture capital investments in financial technology are growing slower than in other markets. The space only saw a 34% growth in global VC funding in the third quarter, compared to 65% growth across all global venture capital investments in the same period.

Here's the complete list of the largest deals in the blockchain industry during the year ending September 30, according to Goldman Sachs. Investment amounts are in the millions.

Goldman Sachs, The Global Venture Landscape: Decrypting FinTech, Oct. 24, 2017