Symbiont, an enterprise blockchain startup, has been keeping a low profile over the last two years, considering the way that the crypto market has been holding onto the limelight. However, with credit to Nasdaq, the company has recently concluded a $20 million Series-B funding round. Other investors included Galaxy Digital, Citi, and Raptor Group, among others.
This is the third funding round for Symbiont, which previously was able to bring in a total of $15.4 million as a result of a Series A funding round in 2017 and a seed round in 2014. The CEO, Mark Smith, explained that they had increased their staff to over 60 employees in the last year, which is more than double what it was before.
“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. So, it was a 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.”
Nasdaq Financial Framework, which is Nasdaq’s software company, plans to use the Assembly smart contracts from Symbiont to help them explore further options for tokenization. This is part of the agreement for the investment the Nasdaq placed in Symbiont. Smith, considering his history in the early times of financial market match engines, explained how blockchain has been making a big impact on technology involving traditional exchanges.
“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.”
“We are infrastructure people: dirt under the fingernails, digging the ditches, laying the roads.”
The proprietary blockchain and smart contracts architecture has allowed Symbiont to keep a one-track mind on the creation of capital markets infrastructure. They have been selective in their use cases and partners, only forming relations ships with a few companies. Vanguard (data management), Lewis Ranieri (mortgage market transparency), and the Synaps platform from Ipreo (improving syndicated loans) have been a few to make the cut.
Unfortunately, as careful as the company has been, some of the partnerships have not gone according to plan. One of the most notable circumstances involved their work from 2015 to 2017, developing a regulatory environment with blockchain technology for the state of Delaware. They performed the work without pay, but their project was halted when Governor Jack Markell left the office.
On the project, Smith noted,
“The new administration came in with less fanfare about the use of the technology and a very conservative approach. 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 Delaware News Journal stated that the single-bid contract was actually $738,000, rather than the $1 million that Smith stated.
Ipreo seems to be another plan that did not pan out, as it was acquired by IHS Markit. Though Smith was unable to elaborate much, he did say,
“Certainly with Citi now in our cap table, we can see how this is going to move forward.”
While Symbiont has definitely done the time in the enterprise blockchain market, they have usually pushed aside over the popularity of competitors, like HyperLedger, R3, Digital Asset, and others. However, Smith has not been quiet about his view of these companies.
“I would argue that we are the only enterprise blockchain solution,”
Smith said. In Smith’s opinion, he doesn’t see the other options of actually being considered blockchains, and some lack the privacy or security that is required.
As far as gathering large consortiums, Smith feels more supportive of individuals on the innovation front. To elaborate, he said,
“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.”
According to Smith, Symbiont has several projects that will be in the production stage this year, like the Vanguard collaboration. Mortgages and syndicated loan projects will come soon after.
The bear market for crypto assets has not impacted Smith by much, considering that he tries to stay away from that industry. He said,
“We kept our head down and focused on what we always believed would be the marketplace, which is a regulated marketplace.”
While he is saddened by the loss of jobs and investments, he is relieved to not be involved himself. He commented,
“We are in the trough of disillusionment and I am extremely excited.”