Everybody wants a piece of blockchain recently, though start-up R3 CEV has found the going a little bit tough of late, dropping its funding target by 25pc.
With Goldman Sachs and Banco Santander walking away from the deal, blockchain start-up R3 CEV has been forced to change its latest funding targets, dropping from $200m down to $150m.
Added to the significant funding target cut, R3 – which runs a consortium of dozens of financial institutions – is instead offering 60pc stake rather than 90pc stake.
Apparently the vast majority of the 42 bank members in the consortium have “expressed an interest” in the deal, though the withdrawal of Goldman Sachs and Banco Santander – both walking away from the consortium entirely, having each been members recently – paints a different picture.
According to Reuters, Morgan Stanley and Australia Bank are another pair of notable financial institutions not showing interest in the deal.
Initially, it aimed to create a new company providing shared services for the owners. R3 would have run this utility for 10 years and retained a 10pc stake in it. However, now it has all changed.
Through its consortium and technology development lab, R3 comes up with ways for the financial industry to use blockchain software.
According to the new terms of the deal, the banks will also acquire a stake in the development lab, which tests new blockchain-based applications.
The new company is supposed to be a spin-off of one of three R3 firms already in existence, named the consortium distributed ledger group.
In May, when the original $200m was being sought, the thinking was R3 was also busy building a distributed ledger technology known as Corda.
This, according to AFR, allows banks to only share what’s needed for the other banks to confirm assets and cash have changed hands, rather than an open blockchain which copies all data to all participants.