New blockchain startup-focused venture fund aims to raise $100 million from banks

Life.SREDA, a Singaporean venture capital firm, has partnered with financial technology expert Chris Skinner on the creation of a new venture fund dedicated to blockchain startups, reports Financial News.

The news outlet said the Banking on Blockchain Fund hopes to raised $50 million from banks by the end of 2016, with the goal of reaching $100 million toward the end of 2017.

Skinner, who is chief executive of the new fund, told Financial News that the fund strives to assist mid-size banks and other financial institutions in making sense of the increasingly crowded blockchain market.

While mid-size and regional banks carry less expertise and resource to support firms than do their larger counterparts, “all banks are trying to get to grips with blockchain,” said Skinner, who added that the fund “will also provide the banks with research outputs and consulting based on the knowledge gathered from the firms we invest in.”

Despite the swell of excitement surrounding blockchain, noted Financial News, the technology is still in its infancy, and some prominent fintech investors have shied away from supporting startups. They complain of too-high valuations and a muddled landscape that masks prospective money-making opportunities, said the news outlet.

“The blockchain dialogue is pretty complicated,” said Skinner. “In financial services, there are five main areas of early use cases: smart contracts; digital identity; clearing and settlement; asset tracking; and supply chain finance and payments.

“There are at least 10 or 12 interesting companies in each of those high priority areas,” creating complication for banks when deciding where to invest, he said.

Financial News reported that Life.SREDA has made a $5-million investment in the fund, and hopes to name its first bank backer by the summer.

David Brear, formerly a director of digital banking and IT research at the advisory firm Gartner, will be a lead partner in the fund. He recently announced he was partnering with Jason Bates, a co-founder of the UK-based digital challenger bank Mondo, to create a financial technology consultancy that would be involved with a blockchain fund, said Financial News.

The publication also reported that Thomas Labenbacher, a former executive at German digital bank Fidor Bank, will serve as the fund’s managing director.

Image via Life.SREDA’s media kit