R3, a startup that last year announced it had raised $107 million to bring blockchain services to the financial sector, is floundering and could be out of money by early next year, according to two former employees of the company. We expect to see several Blockchain labs to find challenges to continue as traction remains out or as firms focus down on the few areas where they believe blockchain is going to make a change such as trade finance, real estate and reinsurance
The company’s reported struggles come amid questions about R3 and its ability to build a business around its version of blockchain, a type of software that facilitates transactions by creating a secure ledger across multiple computers. Fund-raising questions R3 launched in 2014 with ambitious plans of supplying blockchain technology to a consortium of major banks. The company’s initial strategy involved an invitation-only version of blockchain that would let financial institutions carry out transactions in a faster and more secure fashion. The project got off to a fast start as the likes of J.P. Morgan and Goldman Sachs agreed to be founding members of the consortium. Meanwhile R3 developed Corda, its own version of a blockchain (the company prefers the term “distributed ledger technology”), and rapidly added dozens of additional partners.