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Big bank-backed start-up raises $12.75m
A landmark fundraise by Australia’s biggest banks has secured a war chest of $12.75 million to the sector’s blockchain consortium, Lygon, to bolster its research and development into helping banks dump their legacy paper trails and reinforce their ability to create and manage digital contracts and transactions.
Big bank-backed start-up raises $12.75m
A landmark fundraise by Australia’s biggest banks has secured a war chest of $12.75 million to the sector’s blockchain consortium, Lygon, to bolster its research and development into helping banks dump their legacy paper trails and reinforce their ability to create and manage digital contracts and transactions.
Eager to abandon the 200-year-old paper-based ‘bank guarantee’ process and move to a more efficient and robust digital system, the creation of Lygon comes as banks have yielded to the increasing popularity of emerging blockchain systems widely used to store and trade cryptocurrency tokens on highly secure networks.
And following its creation last year by ANZ, Westpac, Commonwealth Bank, Scentre Group and IBM, the consortium has announced that it has raised $12.75 million in a Series A oversubscribed funding round – a significant increase from its initial pre-Series A fundraise from August last year which raked in $5 million.
The funding round led by ANZ Bank, Commonwealth Bank and Aura Ventures, marks an important step in Lygon’s ambitious development of its digital bank guarantee system, in which it uses a computer process of validating transaction information by creating a new “block” and recording that information on the blockchain – a process which is called “minting”.
Lygon’s new bank guarantee process on the blockchain has been designed to take mere seconds, as opposed to potentially weeks to secure leases, projects or property – a major development for banks eager to slash costly and sluggish paper trails and instead focus on delivering quick services to likely impatient clients.
Lygon chief executive officer, Justin Amos said the capital will be used to fund the scale-up in resources required to invite new customers, continue the support of Lygon’s overseas subsidiaries and fund the research and development for delivering other forms of digital financial contracts.
“We are extremely pleased to have completed our Series A funding round, successfully exceeding our equity target of $10 million, which reflects the strong demand for our services both domestically and overseas,” Mr Amos said.
He acknowledged Bishop and Fang Capital Advisory for assisting Lygon through the fund-raising process, and Lygon’s legal team, Piper Alderman, for its ongoing support.
Mr Amos said that staff were again prioritised in this funding round, and that the $12.75 million in capital would go towards ramping up resources, overseas expansion and research and development.
“We are delighted with the breadth and depth of our investor base, and I would like to thank all our shareholders – particularly those that have either reinvested or indicated a desire to invest in future funding rounds,” Mr Amos said.
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