Singapore based venture capital firm Life.SREDA that specializes in fintech (financial technology) startups, is looking to launch a new venture fund to invest in blockchain startups. Life.SREDA is a growth-stage venture capital firm that usually invests in the Series A and Series B rounds for startups. They have generally avoided investing in the seed round. Most of the firm’s current investments are in the payments and banking space. For the new fund, the firm is looking to collaborate with Chris Skinner, a fintech and blockchain consultant.
According to the Financial News, Life.SREDA has committed $5 million so far, and aims to raise capital from mid-sized banks. Several large banks and financial institutions have invested in blockchain startups, most notably Blythe Masters’ firm Digital Asset Holdings that counts some major banks among its investors. However, the space has been less accessible to smaller players in the market.
The fund, called Banking on Blockchain Fund, will likely be more interested in startups in the private blockchain and distributed ledger space than cryptocurrencies. The fund seeks to raise $50 million by the end of 2016 and reach $100 million next year. David Brear will be a lead partner in the fund and Thomas Labenbacher, a former Fidor Bank executive will be the managing director.
According to Mr. Skinner,
The blockchain dialogue is pretty complicated. In financial services, there are five main areas of early use cases: smart contracts; digital identity; clearing and settlement; asset tracking; and supply chain finance and payments. There are at least 10 or 12 interesting companies in each of those high priority areas.
Venture capital money has been flowing quite heavily into the blockchain space, although at a slowing pace. More than $1 billion has been raised by startups in the Bitcoin and blockchain space. However, with time, it is expected that startups will differentiate themselves into working on public blockchains like Bitcoin and Ethereum and on private blockchains that are more attractive to the financial services industry at the moment. Even some startups that started off as Bitcoin companies, like Chain, have now pivoted to provide ‘blockchain solutions’ to institutions, mostly in the financial services sector.
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