Digital Asset Holdings raises $40m to help fund expansion
Digital Asset Holdings raises $40m to help fund expansion
Blockchain start-up run by Blythe Masters also has eye on possible acquisitionsDigital Asset Holdings has become one of the best-funded developers of blockchain software for the financial sector after raising $40m from investors led by the family office of Tony James, president and chief operating officer of private equity group Blackstone.
The move provides a much-needed boost for DAH, which was created three years ago and is run by former JPMorgan Chase executive Blythe Masters. It comes just weeks before a key decision by the Australian Securities Exchange on whether to use the start-up’s technology to overhaul its post-trade equities clearing and settlement system.
Blockchain is a digital distributed ledger system that uses cryptography to create verifiable and shared histories of transactions. It is the basis of cryptocurrencies such as bitcoin, but is also being heralded by many people in the financial sector for its potential to enhance a range of operations, from upgrading back-office systems to automatic execution of contracts.
The latest round of investment in DAH was led by Jefferson River Capital, a family office named after the river that runs through the Montana ranch of Mr James, one of the most powerful figures in the private equity industry.
It takes the total raised by DAH to more than $110m. Ms Masters told the Financial Times the extra cash would be used to fund the expansion of the company by “hiring more people, starting more projects and pushing on with existing projects”. She added: “The other possibility would be to finance acquisitions.”
DAH said it had hired Clyde Rodriguez from Two Sigma Investments, the hedge fund, to become its chief information officer and chief technology officer of engineering. Ms Masters said: “As we move from the development phase to the production phase, he brings us valuable experience of delivering enterprise-grade solutions to demanding clients around the world.”
“We are anticipating a number of product rollouts over the next year,” added Ms Masters, who is based in New York and oversees 130 staff in six locations, including London, Zurich and Sydney.
ASX has said it will announce in December whether it is pressing ahead with its plan to switch its Chess post-trade equities clearing and settlement business on to a blockchain system developed by DAH over the past two years.
“It is a big undertaking, and I am pleased with our progress and the potential of distributed ledger technology to deliver real efficiency gains for the market,” said Dominic Stevens, ASX chief executive, at last month’s annual meeting.
ASX was an early investor in DAH, alongside more than a dozen big financial and technology groups, including Goldman Sachs, JPMorgan Chase, Citigroup, Santander, BNP Paribas, Accenture, IBM and the Depository Trust & Clearing Corporation.
ASX said it “has an option to participate in the [latest] fundraising” after it announces in December whether it will use DAH’s technology. “In the meantime, it’s pleasing that DAH’s growth plans continue to be strongly supported,” the company added.
DAH is also working with DTCC, the main US clearing house, to use its technology for speeding up settlement of repurchase agreements, or “repos”, which are used by financial institutions to raise trillions of dollars in short-term financing.
Switzerland’s SIX Securities Services has hired DAH to develop a “proof of concept” for using its technology to improve efficiency in “securities lifecycle processing” in the country’s financial markets.
Source : https://www.ft.com
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