IBM (IBM), the worldwide technology giant, may be getting closer to making a major investment into the blockchain space. According to a report by Coin Desk, the venture wing of the tech company, IBM Ventures, has been exploring the new technology by investing "employee time and energy" into the space. Now, it appears that IBM Ventures is preparing to assume an equity stake in an industry startup as well. IBM Ventures is reportedly considering from among a number of candidates for possible investments at this time.
Supply Chain Management and Compliance Verticals
According to Christoph Auer-Welsbach, a partner at IBM Ventures, the company may be focused particularly on startups incorporating blockchain and which are in the supply chain management and compliance verticals. Auer-Welsbach explained that "from a time perspective, the time already is right" for such an investment. However, in order for IBM Ventures to be able to initiate a cash investment in a blockchain startup, a number of particular conditions must be met. First, IBM's investments need to occur between 18 months and five years after a company's maturity. Beyond that, investments by the venture wing are limited to company's providing business-to-business products. Auer-Welsbach explained that it was the last of these stipulations which has previously pushed IBM away from cryptocurrency-related companies. "Most companies in the space are in the cryptocurrency field, which we don't see from a B2B perspective as the ultimate angle for us to add value," he said.
IBM Has Focused on Blockchain in Other Ways
Besides the various hurdles standing between IBM Ventures and investments in blockchain companies, the larger tech giant's priority has long been to promote and develop its own blockchain platforms, IBM Blockchain Platform and Hyperledger Fabric. The company has prioritized developing support for these projects over generating revenue on any related investments, for the time being.
Thus, companies that IBM Ventures would be likely to consider are those that have strong, proven business models and multiple clients, allowing for them to participate in the development of a sense of community. In one example, IBM Ventures recently took a position as lead investor for a $15 million round in Lightbend, a company with an open-source platform based in the Scala development language and with a number of prior corporate customers.
There have yet to be many companies which have met all of IBM's criteria, and because of that, the company has remained focused on its own project, Hyperledger Fabric. This platform allows groups of firms to develop into consortia. Marie Wieck, general manager of IBM's blockchain unit, explained that the company's investment in cloud computing was a sort of "plumbing layer" to support blockchain ecosystems. Regardless of where IBM ends up investing, the addition of a major tech company to the blockchain startup world is an important sign of the latter's growth and success.