PayPal, a prime leader in online payments space, has recently invested in a blockchain technology company marking its first-ever investment in a blockchain industry. PayPal has joined the extension of a ‘Series A’ funding round in Cambridge Blockchain – a company that manages sensitive data using shared ledgers for financial institutions and other companies.
PayPal and Cambridge Blockchain have not revealed the amount of investment. The recent filings with the U.S. Securities and Exchange Commission show that Cambridge Blockchain has raised US$ 3.5 million in new equity over the past nine months. Before this, the start-up had raised the US$ 7 million close of its ‘Series A’ in May 2018, and now the total capital investment stands at US$ 10.5 million.
There was an initial investment capital of US$ 7 million in Series A which included US$ 4 million of raised capital and US$ 3 million of converted notes. And, the investors included HCM Capital, the VC arm of Foxconn, which manufactures the iPhone for Apple and Digital Currency Group. The recent investment of US$ 3.5 million came from PayPal and Omidyar Network, Flourish and Future/Perfect Ventures.
On this occasion, a spokesperson from PayPal said, “We made an investment in Cambridge Blockchain because it is applying blockchain for digital identity that will benefit financial services companies including PayPal.”
Matthew Commons, CEO of Cambridge Blockchain, said “PayPal has been working his Massachusetts-based identity startup for the last one year. Cambridge was one among the small regimen of startups in the “Fintech Europe 2018” accelerator program, which was sponsored by PayPal. Indeed, during the last quarter of 2018, Cambridge started working directly with PayPal’s corporate venture group out of San Jose which resulted in this investment.”
Moreover, Cambridge Blockchain has joined hands with LuxTrust, which is financed by the Government of Luxembourg and other financial companies in the country. PayPal had shifted its European headquarters to Luxembourg and has also been granted a banking license there.
Cambridge Blockchain stores, shares and validates data via blockchains, and is compatible with various distributed ledger whether public or private. It currently employs 15 employees across offices in the U.S., Paris, and Beijing.
The key operations of Cambridge Blockchain include the on-boarding of personal data and reviewing of know-your-customer (KYC) as these are crucial for opening new accounts with banks and other financial institutions. Moreover, it also works with Foxconn for commercially sensitive supply chain data. The startup is part of the Decentralized Identity Foundation which counts the Enterprise Ethereum Alliance, R3, IBM Blockchain, and Hyperledger among its members. Decentralized Identity Foundation is a non-profit organization that helps build an open ecosystem where individuals can share in the revenue generated from their own identities or use that information and take it to another place.
In a very short span of time, the blockchain firm has gained solid exposure and hands-on experience with European strictures such as the General Data Protection Regulation (GDPR) and PSD2, the second European payments directive. Cambridge aims to reduce the massive duplication of KYC that’s on rising in the present day financial market by allowing compliant yet efficient sharing of personal data.