Banking News

Enterprise blockchain firm Chain.com acquired by Stellar. A trend?

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Today San Francisco based Chain confirmed that Lightyear acquired it. Lightyear was formed by the Stellar Foundation, the payments protocol founded by Jed McCaleb who previously was CTO at Ripple. IBM recently announced its World Wire cross-border platform based on Stellar. Three months ago Fortune first reported rumors of a $500m Chain.com acquisition. The buying price has not been revealed, but according to Reuters, Chain CEO Adam Ludwin said: “The deal turned out to be a very good outcome for our investors.”

Chain is one of several startups that focus on the financial services industry. The company raised more than $40 million from Khosla Ventures, RRE Ventures, Capital One, Citigroup, Fiserv, Nasdaq, Orange, and Visa.

The Stellar Foundation which controls Stellar’s substantial funds (market capitalization $3.6 billion) last year set up a for-profit entity Lightyear to work on partnerships. This is the vehicle for the acquisition, and it will be renamed to InterStellar.

The logic behind the acquisition is that Chain has relationships with several major financial institutions which would make attractive partners for Stellar’s Lightyear. There’s a group of evangelists that believe that some or all enterprise blockchain work will eventually migrate to public networks. Pure payments are the most mature area and hence the one that has so far gained some traction.

“Chain’s team has led the market for enterprise adoption of blockchain technology, which is a critical component of building a future where money and digital assets move over open protocols,” said Jed McCaleb. “We are thrilled to be joining forces to help organizations build on Stellar.”

Some of the large public cryptocurrency ventures have substantial pools of money that could be used for mergers and acquisitions. Recently BitTorrent was acquired by blockchain protocol Tron. While BitTorrent may operate the notorious file-sharing network, it also owns some very useful peer-to-peer technologies.

There’s likely to be more acquisitions. The continuing downward trend in cryptocurrency prices could encourage acquirers to close deals sooner rather than later, to avoid paying more in cryptocurrency.


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