Online payments giant PayPal has confirmed it has invested in a blockchain company, marking the first investment from the firm in the blockchain space so far.
The firm’s first ever blockchain investment came as part of the Series A funding round in Cambridge Blockchain, a startup specializing in helping banks and other financial institutions manage data shared on public blockchains.
While neither firm has disclosed specifics of the investment, an extension to the Series A funding round saw a further $3.5 million raised over the last nine months, bringing the total funding secured by the startup to $10 million.
The firm is also reported to have raised funds from HCM Capital, the investment arm of tech manufacturers Foxconn, amongst others.
A spokesperson for PayPal confirmed the symbolic investment was a vote of confidence for Cambridge Blockchain and the broader sector. In an email to CoinDesk, the representative explained how Cambridge Blockchain “is applying blockchain for digital identity in a way that we believe could benefit financial services companies including PayPal,” noting, “Our investment will allow us to explore potential collaborations to leverage blockchain technology.”
The investment comes after a year of involvement from PayPal in the startup. PayPal relocated its European headquarters to Luxembourg, at a time when Cambridge Blockchain was partnering with Luxembourg-based LuxTrust to help governments and payment institutions in the country.
Cambridge Blockchain CEO Matthew Commons said this was one of several reasons he felt the investment was a natural fit.
In a statement, Commons said, “We can’t talk specifically about anything commercially that we are doing because it’s all sort of exploratory now, but I think the fact that we are deployed in Luxembourg and they [PayPal] have a major presence there also helped to get things moving.”
“If you are looking to help get some traction for a distributed identity system, it’s great to have a partner like that,” he added.
Despite being one of the world’s largest payment services companies, the investment marks PayPal’s debut in the blockchain investment space. It remains to be seen whether this is the start of a broader move towards blockchain from PayPal and the mainstream online payments sector.
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