JPM Pledged $7.5M for Blythe Masters Blockchain Startup, Other Banks Balk
- Digital Asset Holdings, the blockchain startup led by Blythe Masters, has received a $7.5 million pledge from JPMorgan, but other banks are balking.
Masters joined the newly-formed startup as CEO earlier this year, looking to make another major impact on Wall Street. She appears to be steadfast in her blockchain ambitions, having reportedly turned down an offer to head Barclays' investment bank.
She has turned to Wall Street peers in a bid to raise $25 million according to some reports, and as much as $35 - 45 million according to others. In the latter scenario, the startup would be valued at $100 million.
According to a New York Times report, citing people briefed on the deal, large banks including Goldman Sachs, Bank of America (BoA) and Citigroup were uninterested in contributing after learning that JPMorgan was being offered better terms than other investors.
One may also note that Goldman, BoA and Citi are already involved in other blockchain initiatives, whereas JPMorgan was one of the few major banks not to have disclosed blockchain ambitions aside from the DAH investment.
One of the areas Masters is hoping to disrupt is syndicated loans, large loans handled by institutions that are broken up and sold to different investors in pieces. The process is manual and fragmented and can take up to several weeks to complete. The hope is that a distributed ledger system will streamline the process in the same way it is envisioned for the immediate settlement of stocks and Payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonly the basis of exchange involves fiat currency or legal tender, be it in the form of cash, credit or bank transfers, debit, or checks. While typically associated with cash transfers, payments can also be made in anything of perceived value, be it stock or bartering – though this is far more limited today than it has been in the past.The Largest Players in the Payments IndustryFor most individuals, the payments industry is dominated currently by card companies such as Visa or Mastercard, which facilitate the use of credit or debit expenditures. More recently, this industry has seen the rise of Peer-to-Peer (P2P) payments services, which have gained tremendous traction in Europe, the United States, and Asia, among other continents.One of the biggest parameters for payments is timing, which looms as a crucial element for execution. By this metric, consumer demand incentivizes technology that prioritizes the fastest payment execution.This can help explain the preference for debit and credit payments overtaking check or money orders, which in previous decades were much more commonly utilized. A multi-billion-dollar industry, the payments space has seen some of the most innovation and advances in recent years as companies look to push contactless technology with faster execution times. One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonly the basis of exchange involves fiat currency or legal tender, be it in the form of cash, credit or bank transfers, debit, or checks. While typically associated with cash transfers, payments can also be made in anything of perceived value, be it stock or bartering – though this is far more limited today than it has been in the past.The Largest Players in the Payments IndustryFor most individuals, the payments industry is dominated currently by card companies such as Visa or Mastercard, which facilitate the use of credit or debit expenditures. More recently, this industry has seen the rise of Peer-to-Peer (P2P) payments services, which have gained tremendous traction in Europe, the United States, and Asia, among other continents.One of the biggest parameters for payments is timing, which looms as a crucial element for execution. By this metric, consumer demand incentivizes technology that prioritizes the fastest payment execution.This can help explain the preference for debit and credit payments overtaking check or money orders, which in previous decades were much more commonly utilized. A multi-billion-dollar industry, the payments space has seen some of the most innovation and advances in recent years as companies look to push contactless technology with faster execution times. Read this Term.
Banks have reportedly expressed doubts over the solutions DAH is working on. “It’s not supercompelling,” said one executive. Prospective investors reportedly doubted that the solutions are capable of addressing complications in the loan market, which they also attribute to human behavior.
DAH turned to investment bank Sandler O’Neill to raise money in the spring, and there was reportedly an expectation that fundraising would be complete by the fall. DAH's chief marketing officer (CMO) denied assertions that the startup is struggling to find investors.
There have also been reports of difficulty integrating the two startups "acquihired" earlier this year and Blockstack.io. Two employees reportedly departed the latter, but DAH's CMO said that all employees offered permanent positions at the time of the acquisitions are still with the company.
Masters joined the newly-formed startup as CEO earlier this year, looking to make another major impact on Wall Street. She appears to be steadfast in her blockchain ambitions, having reportedly turned down an offer to head Barclays' investment bank.
She has turned to Wall Street peers in a bid to raise $25 million according to some reports, and as much as $35 - 45 million according to others. In the latter scenario, the startup would be valued at $100 million.
According to a New York Times report, citing people briefed on the deal, large banks including Goldman Sachs, Bank of America (BoA) and Citigroup were uninterested in contributing after learning that JPMorgan was being offered better terms than other investors.
One may also note that Goldman, BoA and Citi are already involved in other blockchain initiatives, whereas JPMorgan was one of the few major banks not to have disclosed blockchain ambitions aside from the DAH investment.
One of the areas Masters is hoping to disrupt is syndicated loans, large loans handled by institutions that are broken up and sold to different investors in pieces. The process is manual and fragmented and can take up to several weeks to complete. The hope is that a distributed ledger system will streamline the process in the same way it is envisioned for the immediate settlement of stocks and Payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonly the basis of exchange involves fiat currency or legal tender, be it in the form of cash, credit or bank transfers, debit, or checks. While typically associated with cash transfers, payments can also be made in anything of perceived value, be it stock or bartering – though this is far more limited today than it has been in the past.The Largest Players in the Payments IndustryFor most individuals, the payments industry is dominated currently by card companies such as Visa or Mastercard, which facilitate the use of credit or debit expenditures. More recently, this industry has seen the rise of Peer-to-Peer (P2P) payments services, which have gained tremendous traction in Europe, the United States, and Asia, among other continents.One of the biggest parameters for payments is timing, which looms as a crucial element for execution. By this metric, consumer demand incentivizes technology that prioritizes the fastest payment execution.This can help explain the preference for debit and credit payments overtaking check or money orders, which in previous decades were much more commonly utilized. A multi-billion-dollar industry, the payments space has seen some of the most innovation and advances in recent years as companies look to push contactless technology with faster execution times. One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonly the basis of exchange involves fiat currency or legal tender, be it in the form of cash, credit or bank transfers, debit, or checks. While typically associated with cash transfers, payments can also be made in anything of perceived value, be it stock or bartering – though this is far more limited today than it has been in the past.The Largest Players in the Payments IndustryFor most individuals, the payments industry is dominated currently by card companies such as Visa or Mastercard, which facilitate the use of credit or debit expenditures. More recently, this industry has seen the rise of Peer-to-Peer (P2P) payments services, which have gained tremendous traction in Europe, the United States, and Asia, among other continents.One of the biggest parameters for payments is timing, which looms as a crucial element for execution. By this metric, consumer demand incentivizes technology that prioritizes the fastest payment execution.This can help explain the preference for debit and credit payments overtaking check or money orders, which in previous decades were much more commonly utilized. A multi-billion-dollar industry, the payments space has seen some of the most innovation and advances in recent years as companies look to push contactless technology with faster execution times. Read this Term.
Banks have reportedly expressed doubts over the solutions DAH is working on. “It’s not supercompelling,” said one executive. Prospective investors reportedly doubted that the solutions are capable of addressing complications in the loan market, which they also attribute to human behavior.
DAH turned to investment bank Sandler O’Neill to raise money in the spring, and there was reportedly an expectation that fundraising would be complete by the fall. DAH's chief marketing officer (CMO) denied assertions that the startup is struggling to find investors.
There have also been reports of difficulty integrating the two startups "acquihired" earlier this year and Blockstack.io. Two employees reportedly departed the latter, but DAH's CMO said that all employees offered permanent positions at the time of the acquisitions are still with the company.