PayPal Enters into Blockchain Space with its Investment in Cambridge Startup

Blockchain

Taking the plunge into the blockchain sector, PayPal has made its first investment in a blockchain startup, Cambridge Blockchain. The startup provides blockchain-based data management services to companies operating primarily in the domain of financial services. There hasn’t been any disclosure on the amount of investment the company has made, but according to the filing by Cambridge Blockchain with SEC, the startup has been successful in raising $3.5 million in its A series funding cycle.

In May 2018 last year, the company raised $7 million in a funding round, thereby, taking the total amount to $10.5 million as of date, as per a report by CryptoNewsZ. Out of the $7 million raised by Cambridge initially, $4 million was infused as a fresh capital while $3 million came in as converted notes from some investors who include the likes of HCM capital and Foxconn’s venture capitalist arm. The recently raised $3.5 million, on the other hand, has been raised from PayPal and Omidyar Network. Looking at the figures, the investment by PayPal may not be huge. Nonetheless, it has sentimental and symbolic mean attached to it.

The chief executive officer of Cambridge Blockchain, Matthew Commons said that PayPal had been involved with the startup directly or indirectly. PayPal sponsored the “Fintech Europe 2018” in which Cambridge participated as a fintech startup. However, the more definitive and concrete relationship between the two companies started when in late 2018 Cambridge associated with corporate venture arm of the PayPal which ultimately leads to this investment, added Commons.

Commenting on the collaboration, PayPal said that it has invested in Cambridge Blockchain with the belief that this association will bring benefit for the companies operating in the domain of financial services besides providing them an opportunity to explore a range of services based on blockchain platform. The spokesperson of the company also confirmed that this is the very first investment of PayPal in any company or startup in the blockchain field.

Cambridge Blockchain Business Model

The business model of Massachusetts-based Cambridge is primarily related to data management based on the blockchain technology. In addition to storing and sharing the data, the startup also verifies its authenticity using the open ledger technology. The service can be run on both private and public blockchain, and the startup has 15 people employed in its offices across Paris, the US, and China.

The chunk of Cambridge’s revenue comes from the vetting services that many banks and financial institutions utilize for KYC purposes. In addition, the company has partnered with Foxconn to handle its crucial data related to supply chain and logistics function. Cambridge is also part of the Decentralized Identity Foundation which counts IBM blockchain, R3, Hyperledger, and Enterprise Ethereum Alliance among its members.

Cambridge claims that it can help the companies to reduce duplication of KYC forms by allowing efficient data sharing services. This is exactly where PayPal is looking to derive efficiency as the company has millions of accounts holders across its platforms globally. After a comprehensive scanning of available options, PayPal has finally selected Cambridge blockchain which is a great achievement and testifies the technological superiority of Cambridge, said Commons.

Related Cryptocurrency News