Wednesday, May 25, 2022

R3 Blockchain Group Raises $107M From Major Intl Companies

R3 Blockchain Group Raises $107M From Major Intl Companies

Blockchain consortium R3 CEV today announced that they had successfully raised US $107 million in funding from investors that included Bank of America, HSBC, Intel, Temasek Holdings, and SBI Holdings.

Also read: Altcoins, ICOs Just Don’t Work: BnkToTheFuture CEO

The consortium aims to use distributed ledger technology to automate the complex processes that modern financial institutions must undergo in order to secure their transactions and remain compliant with regulatory requirements. R3 released its open-source project Corda in April 2016, a platform “designed to record, manage and automate legal agreements between businesses.”

R3 Funding Smaller Than Originally Targeted

R3 logoWhile the $107 million makes it one of the largest investment rounds in a blockchain technology startup to date, the figure is substantially lower than the original $200 million fundraising target originally announced by R3 in May 2016. It reduced that target in November to $150 million, of which this current investment represents an initial tranche.

R3 will reportedly sell a 60 percent stake in the company to investors in exchange for the full $150 million.

The organization was launched in September 2015 to build distributed ledger technology, primarily for use within the prominent financial institutions that backed it. Over the next year, its membership grew to nearly 80 companies. For a time, the list included Goldman Sachs, Santander, Morgan Stanley, JPMorgan, and State Street.

However, as of this month, none of those five companies have chosen to renew their membership, or participate in the current round of financing.

Goldman Sachs and Santander previously made investments in Digital Asset Holdings, another startup focused on developing blockchain technology for financial institutions. JPMorgan and State Street, meanwhile, have notably shifted their sights to the Ethereum Enterprise Alliance (EEA), an organization with similar goals as R3, but using a modified version of the Ethereum blockchain.

EEA yesterday announced over 100 members in its own consortium, in a statement which may have been partially responsible for the substantial price jump in the cryptocurrency Ethereum during that period.

R3 currently has over a hundred people among its staff, and plans to use the funds to hire more software engineers to continue working on Corda. Chief executive officer David Rutter said in an interview, “We are a couple of years away until we see massively impactful products.”

What do you think of this new round of fundraising? Share your thoughts down below.

Images via Inc, R3

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