Blockchain JV Lygon Secures A$12.75m
(26 April 2022 – Australia) Blockchain based joint venture (JV) start-up Lygon has secured a further A$12.75 million in an oversubscribed capital raise.
As the designer of the world’s first digital bank guarantee, the JV between Scentre Group, ANZ, Westpac, CommBank and IBM was founded as a result of major banks accepting they needed to collaborate to solve a perennial customer pain point associated with old-fashioned paper-based bank guarantees (BGs). BGs are common commercial contracts where banks vouch that a customer can pay their debt and are frequently used for commercial real estate transactions in particular.
Based on IBM’s Hyperledger technology, the platform allows ANZ, Westpac and CBA to store their instruments securely on a single platform which can then be accessed by multiple users in the property sector. Lygon planned to raise A$10 million however CEO Justin Amos confirmed the group increased the size of its capital raise due to strong demand from investors.
The funding will be applied to bringing on more staff after 30 roles were hired in the past year with a further 30 headcount to be added in 2022. Lygon is setting its sights on digitising rehabilitation bonds, which are used in the mining industry as a financial security designed to ensure that a state government has funds to restore a mine, exploration site or quarry if an operator does not.
“We have a built, fit-for-purpose bank guarantee platform, but our customers are coming to us and saying they want us to do more. It’s a game-changer from a customer experience perspective. In terms of bank guarantees, they were paper-based systems that are not good for anyone. They’re expensive, prone to delay, and there is operational fraud everywhere” stated Mr Amos.
“How long does it take the entirety of the financial system to shift? We’re predicting three to five years. The biggest challenge so far was establishing the legal framework that underpins the technical engineering that enables the product. The efforts, work and expense that went into that is underestimated. We’ve been developing it since 2016/17 but now it’s a great blueprint to go into New Zealand. You understand how to approach a new economy. It’s also a barrier to entry for others” Amos added.
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