PayPal to buy its first Blockchain startup

Online payments giant PayPal has made its first-ever investment in a blockchain technology company. PayPal has joined the extension of a Series A funding round in Cambridge Blockchain, a startup that helps financial institutions and other companies manage sensitive data using shared ledgers, according to coindesk.com.

Neither PayPal nor Cambridge Blockchain disclosed the investment amount, but recent filings with the SEC indicate that Cambridge Blockchain has raised a total of $3.5 million in new equity from several investors over the past nine months. That follows the $7 million close of its Series A in May of 2018, and brings the total capital raised to $10.5 million.

That first $7 million consisted of $4 million of new capital plus $3 million of converted notes, and came from several investors, including HCM Capital, the VC arm of Foxconn, which manufactures the iPhone for Apple, as well as Digital Currency Group.

The subsequent $3.5 million came from PayPal as well as Omidyar Network, the philanthropic investment firm started by the founder of eBay (PayPal’s former parent); Flourish, Omidyar’s financial inclusion investment spinoff; and Future/Perfect Ventures.

In this way, PayPal’s investment was modest but symbolically important.

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Regarding its part in the funding, a PayPal spokesperson told CoinDesk via email:

“We made an investment in Cambridge Blockchain because it is applying blockchain for digital identity in a way that we believe could benefit financial services companies including PayPal. Our investment will allow us to explore potential collaborations to leverage blockchain technology.”

She confirmed that Cambridge is PayPal’s first investment in a blockchain company.