Baton’s blockchain-inspired bank-to-bank infrastructure raises $12m

3 Sep 2019212 Views

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New York's financial district. Image: © aiisha/Stock.adobe.com

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Baton Systems has raised $12m to scale its bank-to-bank payment system.

On Friday (30 August), Baton Systems announced that it had closed a $12m Series A round.

The Silicon Valley start-up has raised a total of $15.1m since it was founded in 2016 as Ubixi, before later evolving into Baton Systems.

Baton, as it is also known as, provides a high-speed, blockchain-inspired bank-to-bank payments infrastructure, which has been deployed at three of the world’s top 10 banks.

Three years after launching, Baton is already processing more than $12bn in payments each business day. The company claims that its platform increases transparency and reduces processing times from days to minutes, freeing up billions of dollars in tied-up capital.

“The Baton platform integrates with financial institutions’ current collateral and cash systems, leaving their existing business processes, systems and ledgers in place,” the company said.

“Baton then provides a customisable software workflow engine to coordinate among multiple systems and institutions, achieving record-fast, transparent and efficient settlement by moving real assets in real accounts, along with instant reconciliation and reporting for all parties.”

It differs to blockchain in that Baton’s technology enables clients to move real assets sitting in real bank accounts securely and nearly instantaneously without the need for digital conversion, making it “easier” for customers to adopt than blockchain, according to the company.

Investment

The Series A round was led by Trinity Ventures. There was also participation from Alsop Louie and Commerce Ventures.

Arjun Jayaram, CEO of Baton Systems, said: “This investment provides us with the strategic support and firepower to scale our bank-to-bank payment solution for the world’s leading financial institutions even faster and more effectively.

“Speed to market is critical in an industry that is crying out for modernisation while at the same time facing a daunting global regulatory environment.”

Schwark Satyavolu, general partner at Trinity Ventures and a member of Baton’s board of directors, said: “Bank-to-bank settlement today is slow and manual, trapping billions of dollars that could instead be used to grow businesses.

“Baton is completely transforming the global bank payments infrastructure, leveraging the best of blockchain’s potential while mitigating its key concerns. Arjun and his team are the ideal visionaries and practitioners capable of turning this tremendous need into reality – and are already doing so for their many top-tier banking clients.”

Gilman Louie, partner at Alsop Louie, said: “We’ve been a firm believer in the potential of what Baton is doing for the payments industry since day one.

“Since those first conversations, Arjun and his team have rapidly moved from concept to reality with a top-tier set of initial clients, and advanced discussions taking place with the A-list of central banks and global financial institutions.”

Kelly Earley is a journalist with Siliconrepublic.com

editorial@siliconrepublic.com