According to Fortune, Stellar is in talks to buy Chain.com.
Chain is an enterprise blockchain company started back in 2014 and headed by Adam Ludwin. The company has raised a total of $40m in venture funding to date. Ludwin and his team of engineers are highly regarded, and they’re working on some interesting technology. Chain is focused on the enterprise token space.
However, the company has been relatively quiet regarding sales announcements in the last year or so. In May last year they announced a big deal with Citibank and Nasdaq for enterprise payments. Since then the only other announcement was about an academic proof of concept with the Bank of England.
Jed McCaleb who is the CTO co-founded Stellar, and already has an impressive track record in the blockchain world. He founded Mt Gox, the bitcoin exchange, and sold it in 2011 before its high profile collapse in 2014.
His next venture was Ripple, the company that provides an enterprise blockchain solution for global payments. He left in 2013 and founded Stellar which has a similar mission though less enterprise focused.
Stellar aims to ‘move money across borders quickly, reliably, and for fractions of a penny.’ Twenty-five percent of Stellar coins – now called Lumens – were allocated for non-profits working towards financial inclusion. The current market capitalization of Lumens is $4.2 billion.
Stellar has made some significant deals in the last year, including with IBM for remittances in the South Pacific. IBM extended the relationship by announcing they plan to use Stellar for a blockchain carbon credit system.
Additionally, it’s now a platform used for ICO tokens, in a similar way to Ethereum as it has lower transaction costs.
Why a deal?
It’s conceivable that Chain is under pressure. There are several players targeting banks including R3, Digital Asset Holdings, and Axoni. While each of their technologies is quite different, they have similar target markets.
So what’s in it for Stellar? Fortune mentioned that Stellar has plenty of money, and might be looking to gain Chain’s great developers. But even with a tight talent market, the rumored $500m is an awful lot for 20 odd developers.
While an acquihire is possible there are other potential reasons. Perhaps there’s something Stellar likes in Chain’s intellectual property (IP). In other words Chain’s Sequence ‘ledger as a service’. The software has been built out to support specific use cases. These include tokens for ride-sharing companies like Uber, a lending platform, and a crypto exchange.
Most likely its the combination of Stellar buying IP and expanding its team. Time will tell if it’s more than a rumor.