Think Everyone is Doing Coin Offerings? Not This Blockchain Startup
October 16 2017 - 12:28PM
Dow Jones News
By Paul Vigna
The flavor of the month in startup fundraising is the "initial
coin offering," a seemingly unregulated method of capital raising
that has allowed tiny, unknown companies to raise tens or even
hundreds of millions of dollars.
Not everybody's going down this road, however. Digital Asset
Holdings LLC, a New York-based startup building new technology
products for financial-services firms, decided to raise money the
old-fashioned way. The firm, run by former J.P. Morgan Chase &
Co. trading executive Blythe Masters, announced Monday that it had
raised $40 million in a Series B financing led by Jefferson River
Capital, a firm started by Blackstone Inc.'s president and chief
operating officer, Tony James.
Digital Asset, which specializes in products based on
open-ledger "blockchain" systems, also said it had hired as its new
chief information officer Clyde Rodriguez, formerly an executive at
Two Sigma Investments.
With the new financing, Digital Asset has raised $110 million,
one of the highest totals in the blockchain sector. The distributed
ledger of blockchain became well known as the system underpinning
the virtual currency bitcoin. Since then, it has been adopted or
explored for a wide variety of applications by large companies like
J.P. Morgan and International Business Machines Corp.
"We have the opportunity to continue to grow, and want to have
to capital to fund doing that," said Ms. Masters.
She said she wasn't tempted to do an initial coin offering: "At
this stage, we raised everything we wanted to."
Digital Asset didn't disclose a valuation of the deal, saying
only that it will help build out the company that has grown to 130
employees from about 20 in January 2016.
The firm is working with the Australian Securities Exchange,
which is experimenting with a blockchain-based system that would
replace its existing infrastructure for post-trade processes. The
ASX is expected to make a decision in December on how or whether to
move forward with the project.
Digital Asset is also working the U.S.-based Depository Trust
& Clearing Co. to build a new system for repurchase-agreement,
or repo, transactions.
Write to Paul Vigna at paul.vigna@wsj.com
(END) Dow Jones Newswires
October 16, 2017 12:13 ET (16:13 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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