Daily Management Review

$59 Million Investment Interest in Blockchain Startup R3 Expressed by Banks: Media Reports


$59 Million Investment Interest in Blockchain Startup R3 Expressed by Banks: Media Reports
In a boost to the global efforts of popularizing the use of blockchain technology, less than half its overall target of the blockchain consortium R3 CEV might be financed by banks.
According to media reports quoting a person close to the deal, interest in investing $59 million in the company’s first funding round have been expressed by th4e very banks that are involved in the blockchain consortium.
In order to fund its activities focused on developing blockchain-based technology for the financial services sector, R3, a New York-based startup, is seeking to raise $150 million from its members and strategic investors.
The firm restructured the deal to $150 million in return for a 60 percent stake in itself after it had originally sought to raise $200 million, offering prospective investors a 90 percent stake in a new entity it would have run.
The media reported that the firm intends subsequently to reach out to roughly about 30 banks it works with as well as external companies and viewing the reaction to its invitation to its original 42 bank members asking to invest first. It plans to raise the overall amount over the next nine to 12 months.
The media quoted the person who declined to be named because the fundraising is private, saying that of those original 42 bank members, 36 have expressed indications of interest through stakes ranging from $3.5 million to $1 million each.
Reuters had reported on Monday that plans to leave the consortium were being made by Goldman Sachs Group Inc, Morgan Stanley, Banco Santander SA and National Bank of Australia who have already opted out of the fund-raising.
According to media reports, JP Morgan Chase & Co does not plan on leaving the consortium even though the bank has not yet made a commitment to invest.
Australia's Macquarie bank is looking to remain a member of the group’s blockchain lab, a division that leads testing of new applications and it has also not expressed interest in investing, reported the media citing information from a person familiar with the deal. Macquarie declined to comment.
Including UBS Group, Deutsche Bank AG and HSBC, R3, Launched in September 2015, has rapidly gained the backing of some of the world’s largest banks. There is a total of 70 members at the blockchain consortium and development lab of the company. all the members have so far paid membership fees to participate.
Banks are at present looking at blockchain technology to carry out financial processes, such as making international payments or settling trades in securities and the startup is part of a growing cohort of young companies looking to help large financial institutions adapt blockchain technology for these purposes.
Blockchain is a distributed ledger of transactions maintained by a network of computers on the internet without the need of a central counterparty and had first emerged as the system underpinning the cryptocurrency bitcoin.
In order to simplify some of their processes and slash back office costs, banks are hoping that it can be deployed in finance.

Science & Technology

Apple takes up to develop Apple Watch for health monitoring

Hyperloop is growing in Europe

Analysts: US gamers prefer mobile games

Google Assistant Winner Of Head-To-Head Test Of Digital Assistants, Beats Siri And Alexa

Animals Can Burn Muscle To Supplement Body Water Needs, Finds A Study

The future of private flights at Farnborough air show

Experts Want To Fix Problem Of AI Hurting People Of Color And The Poor

New Study Claims Astrobiologists Locating Possible Life On Moon In Its Life Time

Wreck Of Russian Ship Rumoured To Have 5,500 Boxes Of Gold Found Near South Korean Island

Gene Editing of Human Embryo Could Find ‘Moral’ Grounds: UK’s Ethics Council

World Politics

World & Politics

Venezuela comes up with a new monetary reform

Paris is losing its icon public bicycle sharing system

Heat wave in Europe creates problems for brewers

Is it legal to print a gun? US is discussing 3D printing of firearms

Southeast Asian Leaders To Seek Clarity Of US Policies For The Region Form Pompeo

The world economy is accumulating environmental debt

US To Invest $113 Million In Asia To Counter Chinese Influence

US Intelligence Detects New Activity At Its Missile ICBM Factory: Reports