Nasdaq Leads $ 20 Million Funding Round for Blockchain Startup Symbiont

[PRIBO247]

Enterprise blockchain startup Symbiont has closed a $20 million
Series-B funding round led by Nasdaq Ventures with participation
from Galaxy Digital, Citi, Raptor Group and others.

The firm, which has kept a fairly low profile the last two years as
the cryptocurrency market’s gyrations overshadowed the
enterprise sector, previously raised a combined $15.4 million from
a seed round in 2014 and Series A in 2017.
Symbiont CEO Mark Smith told CoinDesk that the firm doubled its
staff last year, and now has more than 60 employees.

“We have been very good stewards of capital for the six years we
have been in business. I think we have done more with less than
anybody out there,” Smith said. “So it was time for us to do a
bigger round and adding the Nasdaq as an investor and partner,
and Citi as an investor and partner, really solidifies our strategy.”

As part of the investment, Nasdaq Financial Framework, a software
company owned by the exchange, will integrate Symbiont’s
Assembly smart contracts platform to explore new avenues
involving tokenization.
Smith, a veteran of the early days of financial market matching
engines, explained there has been a big movement towards
combining blockchain with traditional exchange technology.
“Symbiont will give Nasdaq the ability to originate a financial
instrument and the smart contract to custody it on a blockchain, to
allow trading to occur with their matching engine, to allow
surveillance to occur across the network using Nasdaq technology
and then to perform settlement on a blockchain,” he said.
To be clear, Symbiont is not working with the Nasdaq proper, just
the software arm, which sells tech to other exchanges, clearing
houses and central securities depositories in about 50 countries.

As Smith put it:
“We are infrastructure people: dirt under the fingernails, digging
the ditches, laying the roads.”

Win Some, Lose Some
Indeed, Symbiont has kept a firm focus on building capital markets
infrastructure using a proprietary blockchain and smart contracts
architecture.
The startup has lasered in on a handful of carefully selected use
cases and partners, such as index data management with
investment giant Vanguard; making the mortgage market
transparent and more efficient with Wall Street legend Lewis
Ranieri ; and optimizing the syndicated loans market with Ipreo’s
Synaps platform.

However, not all its partnerships panned out. For instance,
Symbiont dedicated a lot of time and effort between 2015 and 2017
helping create a blockchain technology-enabled regulatory
environment in the state of Delaware, creating rules for share
registry and the ability to create a whole new class of securities.
All that work, done free of charge, came to naught for Symbiont
when Governor Jack Markell’s term ended, according to Smith.

“The new administration came in with less fanfare about the use of
the technology and a very conservative approach,” he said.

“Instead of moving forward, they took a big step back and decided
to defend the incumbents against what they considered disruptive
tech, then reached out to IBM and spent over $1 million replicating
the exact road map we gave the state.” (The precise amount of the
single-bid contract was $738,000 , according to the Delaware
News Journal.)
Another wrench was thrown into the works last August, when
Symbiont’s partner on syndicated loans, Ipreo, was acquired by
IHS Markit, which has worked with ethereum-based Quorum
(developed by JPMorgan) on this use case.

Smith could not say too much about this but hinted that
Symbiont’s new big-bank investor would go to bat for it on the
syndicated loan front. “Certainly with Citi now in our cap table we
can see how this is going to move forward,” he said.
Competitive landscape
It’s common these days to view the enterprise blockchain world as
consisting of Hyperedger, R3, Digital Asset and enterprise
ethereum variants. Symbiont has been around for as long as any of
these forks, consortiums or other proprietary solutions, and Smith
is never shy about sharing his opinion of them.

“I would argue that we are the only enterprise blockchain
solution,” he said. The others, he contended, either aren’t really
blockchains or have privacy and security shortcomings or haven’t
produced anything beyond ideas.

On the subject of corralling together large consortiums, Smith
believes innovation always comes from individuals and small
teams that are able to iterate quickly and nimbly.
“I think what you get in consortiums is just compromise. You end
up with average tech, nothing revolutionary – sometimes barely
evolutionary. Creating a back office as a service with a shared
ledger is not revolutionary. That’s what a consortium will get
you,” Smith said.

So what does Symbiont have to show for its work? Smith said
several of its projects will enter production in 2019, starting with
the Vanguard collaboration, which uses corporate action data to
manage the asset manager’s passive indices. Syndicated loans
and mortgages will follow.
As far as the sustained bear market for crypto assets is concerned,
Smith said from day one his firm had stayed away from those sorts
of “shenanigans.”

“We kept our head down and focused on what we always believed
would be the marketplace, which is a regulated marketplace,” he
said.

Of course, he is very sad to hear of people losing their jobs and
said it was unfortunate that many people lost a lot of money. But
overall, Smith said he is glad to be out of the hype cycle,
concluding,
“We are in the trough of disillusionment and I am extremely
excited.”

https://www.coindesk.com/