PayPal has invested in Cambridge Blockchain's Series A funding round, marking the payments giant's first venture into blockchain startups. Cambridge Blockchain develops digital identity management sof
PayPal has invested in Cambridge Blockchain's Series A funding round, marking the payments giant's first venture into blockchain startups. Cambridge Blockchain develops digital identity management software for financial institutions.
The Series A closed in May 2018 with $7 million from Foxconn's HCM Capital, Partech Partners, FuturePerfect Ventures, and Digital Currency Group. SEC filings show the round expanded by $3.5 million more through investors including Omidyar Network and Flourish over the nine months that followed.
PayPal and Cambridge Blockchain plan to "explore potential collaboration to leverage blockchain." Cambridge Blockchain provides financial institutions with blockchain-based digital identity solutions. These tools both protect identities and streamline know-your-customer (KYC) compliance while maintaining adherence to regulations including GDPR and PSD2, Europe's payments directive.
The startup will use the new capital for hiring and research and development work.
"We made an investment in Cambridge Blockchain because it is applying blockchain for digital identity in a way that we believe could benefit financial services companies including PayPal," a PayPal spokesperson told CoinDesk. "Our investment will allow us to explore potential collaborations to leverage blockchain technology."
Matthew Commons, Cambridge Blockchain's CEO, said PayPal had been involved with the startup for about a year before this investment. Cambridge Blockchain participated in PayPal's sponsored Fintech Europe 2018 accelerator program. In late 2018, Cambridge Blockchain began working with PayPal's corporate venture group, and that collaboration led to PayPal joining the Series A.
While this marks PayPal's first investment in a blockchain startup, the company has other ties to crypto. PayPal filed a patent in March 2018 for a "virtual currency transaction system" designed to expedite cryptocurrency transactions. It filed another patent in 2016 for a payment device that could process Bitcoin, Litecoin, and Dogecoin.
