Start-up blockchain consortium R3 CEV looks set to raise only $59m out of a sought after $150m.
Following the exodus of banks from the consortium which launched in September 2015, the blockchain consortium looks likely to fall well short of the $150m funding round it had been hoping for.
Over the past few weeks a number of large banks that formed part of the 70 original members of the consortium have decided to withdraw their backing.
Banks such as Morgan Stanley, Goldman Sachs, and Santander have all been reported as withdrawing their membership.
R3 had already significantly reduced the amount of money it was hoping to get from its funding round from $200m to $150m but now it looks as though even this reduced target won’t be reached.
The New-York based start-up that had been hoping to use the money to fund its efforts in developing blockchain-based technologies for the financial services sector is now said to be looking to raise the money over the next nine to twelve months.
The group initially reached out to 42 founding members in order to raise the money and now plans to target the remaining original banks and private companies, a source told Reuters.
The source said that 36 original members have expressed interest through stakes ranging from $3.5m to $1m each.
At its launch the consortium raised large amounts of interest with banks like the UBS Group, Deutsche Bank, and HSBC all joining. However, since the blockchain technology market has significantly matured over the past 12 months, many banks are re-assessing their partnerships.
Now that the technology is moving much closer to being in production deployments, banks are looking to develop one-to-one partnerships rather than paying for membership to groups such as R3.
The benefit of banks developing partnerships themselves is that any blockchain technology would be theirs to distribute, unlike in R3 which appears to have taken an open source approach with the code release of Corda.
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