Goldman Sachs, JPMorgan Lead $32 Million Series B Investment In Axoni’s Ethereum-based Financial System

Axoni, a capital markets technology company focusing on distributed ledger architecture, has reportedly raised $32 million to help it complete a massive project on the Ethereum blockchain. The financial technology firm is in the process of migrating traditional financial systems to more high-end infrastructure that can inter-operate with the Ethereum network.

The Series B investment, which is being supported by Goldman Sachs and venture capital investor Nyca Partners, will be directed toward funding the ongoing development of Depository Trust, a corporation that manages securities for the US National Markets.

Additionally, part of the investment will be used to shift an $11 trillion Trade Information Warehouse managed by Clearing Corporation over to a proprietary blockchain-based database system.

Axoni’s Investors: Digital Currency Group, JPMorgan, Well Fargo

Other notable investors in Axoni’s project include the Digital Currency Group, JPMorgan, Andreessen Horowitz, Citigroup, and Wells Fargo. Notably, the large group of investors not only consists of major Wall Street firms, but also a number of Silicon Valley companies.

Greg Schvey, the co-founder of New York-based Axoni, said that the company’s goal is to “Turn projects into products”, as its distributed ledger technology (DLT) initiative is being funded investors who are focused on creating real world blockchain-based applications.

Schvey also remarked that “these are very strange investors” while noting that “we have deep strategic and commercial engagements with most of them.”

Moreover, the previous co-founder of TradeBlock, a provider of trading tools to institutional crypto investors, revealed that the Series B investment has increased Axoni’s capital to $55 million.

Goldman Sachs’ Principal Strategic Investments group, which actively invests in projects that are inline with the investment bank’s business interests, is reportedly one of the main investors in Axoni’s project.

Axoni’s Executives To Include Goldman Sachs’ Managing Director

Axoni’s management team intends to use its Series B funding to not only help develop its enterprise-level financial system, but also to hire more engineers who can complete the project and help the company further expand its existing operations.

Founded in 2016, the capital markets technology firm intends to assist its current clients and their users as they begin to adopt the various other platforms the company is developing. While Schvey did not provide any details regarding these platforms, he did mention that Ashwin Gupta, Goldman Sachs’ managing director, is involved in their funding and implementation phase.

Notably, Gupta and Well Fargo marketing executive C. Thomas Richardson are expected to join Axoni’s board of directors. The existing board members also include Joe Ratterman, the former CEO of Bats Global Markets, now known as Cboe.

Axoni’s Series B investment has come right after the company successfully completed its Wells Fargo-backed $18 million Series A last month. During this short time period, the capital markets technology firm also partnered with the Depository Trust & Clearing Corporation (DTCC), an American post-trade financial firm that handles $1.6 quadrillion in yearly securities transactions.

Prioritizing Growth Over Profitablity

At present, however, Schvey stated that Axoni is “not yet profitable, but with a conscious choice to prioritize growth.” According to a DTCC representative, Axoni’s Axcore financial blockchain platform is expected to go through “industry-wide testing cycles” in the coming months. Schvey added that, “Go live has a lot of other preparations and testing.”

Commenting on the scope and potential impact of Axoni’s project, the company’s co-founder explained: 

“In the equity derivatives market, you have a world where everybody is managing connections to all the various counterparties independently, they’re each managing their own data systems, their own calculations systems, and what that leads to is a substantial amount of breaks. When we think about blockchain technology, what we really think about is the application of it to solve for data synchronization.”