Financial giants invest in blockchain starup Axoni: Sources

Blockchain technology set to gain traction with investments from Goldman Sachs, JPMorgan, Barclays, ICAP, Thomson Reuters, etc.

According to sources familiar with the deal, JPMorgan Chase & Co, the Goldman Sachs Group Inc. along with a group of other financial institutions, which includes ICAP Plc’s venture arm, are in the process of finalising an investment in Axoni, a blockchain startup.

As per a source, the investment is said to be in the range of $15 million to $20 million. Details of this investments is likely to be announced later this week, said sources on the condition of anonymity.

Sources have preferred to remain anonymous since they were not authorised to speak publicly on the matter.

When contacted on the phone, a representative for Axoni declined to comment.

The deal represents Wall Street’s latest efforts to gain traction with blockchain technology, which first emerged as a system for bitcoins, a digital currency.

The technology allows the creation of a shared electronic ledger that allows all parties to track information through a secure network, without the need for third party verification.

Wall Street is betting that blockchain and similar technologies can be used to slash some of the transaction and processing related costs that back-office operations typically entail.

Based out of New York, Axoni is a company that helps banks and other financial institutions develop blockchain software to run capital markets processes.

Over the course of the last six months, it has run a number of high-profile experiments with some of the biggest players in the financial industry. The areas in which it covered in its exercises includes, foreign exchange and processing of post-trade credit default swaps.

The decision to invest in Axoni comes in the wake of R3 CEV, a rival blockchain company, reducing its investment amount in the company, which it was set to invest in a new funding round. The amount it would have invested would be in the range of $150 million to $200 million.

Earlier this year in February, Goldman Sachs and JPMorgan had also invested $60 million in Digital Asset Holdings, a New York-based blockchain startup which is run by Blythe Masters, a former JPMorgan commodities chief.

Significantly, in October, Axoni had confirmed that nine financial giants, including JPMorgan, Barclays Plc and Credit Suisse Group AG had successfully conducted a test using its blockchain-based software on post-trade processing of over-the-counter-swaps.

The group also included Thomson Reuters Corp.


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