R3 CEV, an innovation company that unites leading financial companies with the aim of research and development of blockchain usage in the financial system, has attracted the investment of total $107 million.
More than 40 institutions from more than 15 countries participated in the first two tranches of the fundraising round led by Bank of America Corp, SBI Holdings Inc, HSBC Holdings Plc, Intel Corp, and Temasek Holdings.
The list of other major investors includes ING Groep NV, Banco Bradesco SA, Itaú Unibanco SA, Natixis SA, Barclays Plc, UBS Group AG, and Wells Fargo & Co.
The final third tranche will take place later this year.
R3 unveils its plan to raise $150 million from members and strategic investors, and give them a 60 percent stake.
“This year we will have pilot projects and early production phase products in the market,” R3 Chief Executive David Rutter said in an interview. But “we are a couple of years away until we see massively impactful products,” the R3 spokesman said.
Several large banks including JPMorgan Chase & Co, Goldman Sachs Group Inc, Banco Santander SA, and Morgan Stanley departed from R3 just before the completion of the first two tranches.
JPMorgan Chase & Co quit the initiative at the end of April. Earlier this year, the bank partnered with Microsoft, Intel, UBS, and other companies to form The Enterprise Ethereum Alliance to develop standards and technology for easier use of the blockchain code Ethereum. The bank is also a member of the Hyperledger Project led by the Linux Foundation.
“Ethereum was a platform we looked at and decided was not fit for purpose,” Charley Cooper, managing director of R3, said. “Our thinking was, it would be easier if there was solution fit for purpose, if something out there was close we could adapt it to our needs, but meanwhile we’re going to build something in parallel, a platform fit for purpose for financial services. Ethereum was not deemed by R3’s experts and our members to be appropriate for the financial services industry”.
Earlier, Goldman Sachs Group Inc, Banco Santander SA as well as Morgan Stanley and National Australia Bank decided not to renew their memberships. However, the fact that Goldman and Santander abandoned R3 doesn’t mean the loss of their interest in the blockchain. They invest in some other blockchain startups, including Digital Asset Holdings LLC.
R3 consortium was launched in September 2015 with the backing of nine of the world’s largest investment banks. The number of participants soon reached about 80 financial institutions that cooperate to leverage the blockchain technology.