Investment Companies are jumping at the opportunity to diversify their portfolios by funding blockchain technology. Kuala Innovations Limited have recently jumped on board, having procured stakes in both Factom and SatoshiPay within a month.
Kuala Innovations Limited has announced their second blockchain industry investment. The newest venture is a US$400,000 investment into Factom Inc, in exchange for a 3.64% stake in the recordkeeping platform which utilizes blockchain technology. The investment values the company at US$11m.
“We’re changing how businesses manage data and keep records.”
— – Factom
Factom is primarily about data management using blockchain technology. To this end, the company focuses on three key processes; Proof of Existence, showing that data existed at a certain time and in a specific form; Proof of Process, linking updated versions to existing instances; And lastly, Proof of Audit, verifying the changes in the updated data or documents.
Factom’s platform leverages the security of Bitcoin, with a data layer that creates a cryptographic hash of data and documents, and then storing these unique identifiers on the blockchain. Millions of real-time documents can be secured in this manner by using just a single hash.
Factom were able to demo the platform’s abilities by securing 28,000 books, from Project Gutenberg, using only four hashes. This technology can also be applied by businesses and governments to maintain time-stamped records of data, which are then permanent, decentralized and tamper-proof. This provides the opportunity for a variety of industries to reduce the cost and complexity of audits, record management, and compliance with government regulations.
“Use the blockchain to power a remarkable range of applications, including audit systems, medical records, supply chain management, voting systems, property titles, legal applications, and financial systems.”
— – Factom
Factom has forged successful partnerships in some key areas of interest, earlier this year they announced a partnership with HealthNautica. The President of Factom, Peter Kirby, stated that “one of our goals while developing this software was to offer a way to ensure the integrity of medical records, while still maintaining patient privacy.”
The company also partnered with the Honduran Government, in an effort to provide a solution to the ongoing land title disputes which have wreaked havoc on the country’s people and economy for decades.
“The next step is educating insurance companies in using the blockchain for their record keeping, so that all parties involved are able to easily verify the accuracy of the claims and further increase efficiency in medical billing processes, while still protecting client confidentiality.”
— – Andrew Yashchuk, Factom Board Member
Kuala Innovations agrees with Yashchuk, believing there is a need for these processes in the insurance industry, “These same transparent audit tools can be used to build more transparent and accountable claims processing systems for the insurance industry and create more valuable models of risk analysis and customer profiling.” To fill this gap in the market Factom are working on proof of concepts with insurance providers, expanding their knowledge on how to integrate the platform into the existing systems.
"Factom has the potential to revolutionise the way industries handle, process and store ‘big data’, applying the huge advances of blockchain technology to real commercial issues and improving existing practices in terms of cost, time and effectiveness.”
— – Jim Mellon, Kuala Innovations Co-Chairman
Jim Mellon, was appointed as executive director at Kuala Innovations in July this year. He studied Philosophy, Politics and Economics at Oxford University and is an entrepreneur with a range of interests including bitcoin. Mellon has a keen focus on undervalued sectors and concentrates on life sciences, robotics and fintech. He is co-author of four books and in his most recent publication “Fast Forward,” bitcoin has its own dedicated chapter, and Ethereum is also mentioned.
Mellon believes there is a bright future for Factom, with their growing sales and developer network, providing additional application integration opportunities. He suspects that the next 12 months will see a lot of client wins for the blockchain company, “the Board believes this seed round investment by Kuala comes ahead of a significant value shift for Factom when it completes its anticipated Series A funding in the first half of 2016.”
“In selecting investment opportunities, the Board will focus on businesses, assets and/or projects that are available at attractive valuations and hold opportunities to unlock embedded value.”
— – Kuala Innovation
Kuala’s first investment in the blockchain industry was also very recent. Last month SatoshiPay, a nanopayment provider, saw a healthy injection of capital from Kuala. In a recent statement the investor advised that 1,471 shares had been purchased for EUR€159,985, putting the companies value around EUR€1.6m.
SatoshiPay is a two-way payment platform that can provide online content providers with a means to monetise their content, through the ability to accept payments smaller than 1 cent. Although the payment platform can handle traditional payment amounts, Kuala believes the “real technical innovation” lies in these nanopayments.
"SatoshiPay will provide a direct alternative to pay-walls, currently adopted by some media companies, and require the user to pay for consumption on a per article, per song or per download basis; or for content to be consumed and paid for on an incremental basis."
— – Kuala
The Kuala board have stated that online content will move to a “consumption model”, in which consumers will be paying to view, watch, read or listen to content, and payments will be made autonomously. "We believe SatoshiPay is at the forefront of this change, and the disruptive payment software it has developed has enormous potential,” said Mellon.
SatoshiPay are due to release a first project to the public at the end of 2016, following the successful release of a prototype website widget. The recent investment from Kuala is in addition to a larger funding round lead by their London-based advisor Coinsilium, who introduced SatoshiPay to Kuala.
Kuala Innovations restructured in November 2014, which involved rebranding from China Growth Opportunities, and highlighted a shift in focus from China to the American and European markets. This leaves the door wide open for additional cutting edge technology companies to benefit from financial investment from Kuala.