- Investment Areas
From Global Trade Review (GTR) | By Sanne Wass
Fintech firm TradeIX will look to accelerate the growth of the Marco Polo blockchain project, after receiving a US$16mn investment from ING and other financial players.
TradeIX is the world’s first trade finance specific open-source blockchain platform, which allows financial institutions to develop their own trade finance applications with open APIs.
The company announced last week that it had closed a series A funding round led by ING Ventures, the venture capital arm of ING, and joined by BNP Paribas, Kistefos and Tech Mahindra.
In a statement, TradeIX CEO and founder Rob Barnes calls the investment “a significant stepping stone” for the company, adding that the cash injection will be used to boost hiring, accelerate customer acquisition and platform development.
One of TradeIX’s flagship projects is Marco Polo, a platform for open account trade developed with R3 and 10 international banks, including ING and BNP Paribas.
Powered by R3’s Corda, it enables real-time connectivity between trade participants, improves visibility into trade flows and simplifies access to credit and risk mitigation services throughout the trade lifecycle.
Daniel Cotti, CFO at TradeIX, tells GTR that pilots are currently being prepared and are scheduled to begin in October. The platform will then move into production and be commercialised next year.
He says the funding round will allow TradeIX to “accelerate resources to the Marco Polo project to ensure that we maximise the potential of the industry initiative with additional trade orchestrations”, also adding that the firm will be “growing the Marco Polo ecosystem aggressively”.
The banks involved in the project at this point are Bangkok Bank, BNP Paribas, Commerzbank, DNB, ING, OP Financial Group, RBS, SMBC and Standard Chartered, with Natixis being the latest to join in late May.
Two other banks are “about to sign”, according to Cotti, who could not publicly reveal the names, but added that “we are talking to many other interested banks”.
A number of other financial institutions, including Barclays, BBVA, Bladex and Wells Fargo, were part of the original consortium developing the proof of concept, but decided to leave the project as it entered its pilot phase.
“We needed the banks to help us pay for this,” Cotti explains. “And some of the banks had too many other projects or didn’t have the budget, or weren’t able to present a business case internally that was approved.”
ING and BNP Paribas, together with Commerzbank, were the core banks driving the proof of concept throughout the second half of 2017.
With ING’s investment, the bank is now “intensifying our co-operation with TradeIX”, says Mark Buitenhek, the bank’s head of transaction services. He emphasises that while ING sees “a lot of opportunity in distributed ledger technology”, it is TradeIX’s open platform that makes it appealing.
“‘Open’ is what ING thinks the future of financial services is going to be,” he adds.
According to Benoit Legrand, chief innovation officer of ING and CEO of ING Ventures, the investment means the bank can offer TradeIX’s solution to “even more clients in the near future”.
The announcement comes just a few weeks after another blockchain consortium announced it is going into production with a similar blockchain solution. The we.trade platform is powered by Hyperledger Fabric and is developed by nine European banks together with IBM.
Speaking at the Money2020 fintech conference in Amsterdam in early-June, Joost Volker, lead product manager of trade at Rabobank, said we.trade is “now in a production environment” and will host its first transactions later in the same month. He added that the consortium will “use the period after summer for a large roll-out” to the broader market.
While there are technical differences between the Hyperledger Fabric and Corda blockchain frameworks, we.trade is, like Marco Polo, a solution for tracking and financing open account trade. However, we.trade is mainly focused on SMEs trading within Europe, whereas Marco Polo will be a global platform for all types of clients.
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