VAKT, the blockchain post-trade solution for the oil sector, announced that Argus Media and S&P Global Commodity Insights have invested in the platform that raised $57 million previously. The two benchmark pricing firms join heavyweight shareholders, including energy firms BP and Shell, traders Gunvor, Koch and Mercuria, and major banks. IHS Markit, now part of S&P Global, quietly invested in VAKT during 2021.
The real question is, why would companies known for their benchmark pricing get involved in a post-trade solution? The answer is the planned future tokenization of oil contracts which VAKT confirmed in the announcement.
“By interfacing with Argus’ systems and data, VAKT customers will benefit from enhanced information and intelligence flows, which could transform the way energy and commodities markets work,” said Argus Media Chairman and CEO Adrian Binks.
VAKT is playing a key role in the digitalization of the sector connecting the entire ecosystem, including oil companies, traders, brokers, terminals, inspection companies, and banks. It uses the Ethereum-based Quorum permissioned blockchain.
The solution digitizes the paperwork, including trade confirmations, contracts, logistics and invoicing. Most importantly, the data is cryptographically verifiable, which is critical given the numerous frauds in the commodities sector in recent years.
And it continues to grow. “Transaction and nomination volumes on the VAKT platform have grown substantially over the past year,” said VAKT CEO, Etienne Amic.
The latest published accounts for the year to December 2020 showed revenues of less than a million dollars and a loss of $9 million. By that point, the company had raised almost $47 million in funding. We believe that included a $5 million investment from Saudi Aramco announced in January 2020, the last disclosed funding.
However, there was an unannounced $10 million stock injection in November 2021, bringing total funding to $57 million. It’s unclear whether that was from existing investors or the two new stockholders announced yesterday.
Meanwhile, there are multiple other blockchain initiatives targeting the oil sector. VAKT has a close association with the trade finance platform komgo, which has several common shareholders. Equinor, one of the backers, has also partnered with Data Gumbo to automate oil drilling contracts. And in the U.S., there is the Blockchain for Energy consortium (formerly OOC) for oil extraction.
Update: added reference to IHS Markit