Goldman Sachs And J.P. Morgan Join $32M Series B in Enterprise Blockchain Startup Axoni Posted on : Aug 14 - 2018

Enterprise blockchain startup, Axoni, has raised $32 million to help it finish moving some of the largest financial infrastructures in the world to technology that interoperates with the ethereum blockchain.

Led by Goldman Sachs and Nyca Partners, the Series B investment will be used to complete work on projects including the Depository Trust and Clearing Corporation’s effort to move its $11 trillion Trade Information Warehouse to a custom-built blockchain.

With other investors including Wells Fargo, J.P. Morgan, Citigroup, NEX Group, Franklin Templeton, Andreessen Horowitz, Y Combinator, Digital Currency Group and more, the investment represents a diverse sampling of Wall Street institutions, and the Silicon Valley investors out to disrupt them.

But what sets the capital infusion apart from other plays in the enterprise blockchain space is how many of the investors in the New York-based company are also clients turning blockchain technology into real distributed ledger applications. Or as Axoni co-founder, Greg Schvey described it in an exclusive interview with Forbes: "Turning projects into products."

“These are very strategic investors,” said Schvey, who is also Axoni's CEO. “We have deep strategic and commercial engagements with most of them.”

The investment, which Schvey described as being “in line with the standard terms and dilution" associated with Series B financing, brings the total capital raised to $55 million.

The lead Goldman Sachs investment came from the bank’s Principal Strategic Investments division that makes investments with a strategic look to the bank's business interests. As shareholders in the DTCC, Goldman Sachs was already an indirect investor in Axoni, and has other projects ongoing as well.

As part of the Series B, Schvey, 31, and his co-founder brother, Jeff, 33, plan to substantially increase the number of employees from 55, mostly via new engineering hires. In addition to the new employees, Schvey says the firm that was founded in 2016 plans to further invest the funds to help existing clients integrate their own users into three platforms nearing completion.

While Schvey refrained from revealing too many new details about those integrations, part of the investment includes Goldman Sachs managing director, Ashwin Gupta and Wells Fargo’s head of market structure and electronic trading services, C. Thomas Richardson, taking a seat on Axoni’s board of directors. The pair join existing board members, Michael McFadgen of NEX Group, and Joe Ratterman, the former CEO of Bats Global Markets, now Cboe.

Notably, less than a month after Axoni closed its $18 million Series A led by Wells Fargo and NEX Group, the startup announced its partnership with the DTCC, the largest financial infrastructure in the world, processing $1.6 quadrillion in securities transactions annually. View More