Blockchain startup Everledger has secured $20m in a Series A funding round led by Chinese technology conglomerate Tencent.
Other investors involved in the round included Rakuten, Graphene Ventures, Bloomberg Beta, Fidelity and Vickers Venture Partners, who took the total amount invested in the company to $30.4m.
Everledger provides “secure and permanent” digital records to businesses and consumers. The startup’s blockchain technology is used to store information, such as characteristics, condition and ownership, on high-value assets such as diamonds.
Its Diamond Time-Lapse Protocol, for example, uses the blockchain to store records on diamonds from when they’re mined to when they’re sold and beyond, helping to keep track of size, quality and ownership among other things.
According to Everledger, tracking assets using blockchain technology will help to provide “greater clarity and confidence in the marketplaces where transparency is a strategic imperative”.
The money will help the London-based startup to carry out its expansion plans, according to founder Leanne Kemp.
“Having this strong investor cohort join us at this stage in our development is both validation of the innovation of our innovation we’ve displayed to date, and a statement of future intent,” Kemp said.
“They will support us in bringing more visibility to good business practices in industries that impact millions, if not billions of people in developing countries.”
Following the Everledger funding round, the startup will collaborate with Tencent to offer blockchain-tracked diamonds to users of its WeChat messaging platform.
Everledger funding round a success despite fall in blockchain investment
Everledger’s successful funding round comes despite investment in the blockchain market falling.
According to a recent report by venture platform Outlier Ventures, titled State of Blockchains Q2 2019, a total of $822m in venture capital funding was raised by blockchain startups during the first half of 2019.
This means that more than $3bn would need to be raised in the second half of the year in order to match the total $3.9bn raised throughout 2018 according to blockchain research group Diar.
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Speaking to Cointelegraph, Outlier Ventures’ head of research Lawrence Lundy-Bryan described 2018’s blockchain industry as an “outsized” bull market.
Blockchain investment ballooned in 2018 as venture capitalists looked for new ways to get in on blockchain technology beyond cryptocurrencies. Deals included Sequoia Capital’s $400m investment in cryptocurrency mining hardware manufacturer Bitmain, as well as the $163m raised by blockchain-based cloud computing developer Dfinity.
The Outlier Ventures report noted that “conservative investing has become the norm” in 2019, with investors opting to invest larger sums in later stage startups that have demonstrated an ability to gain traction and make money.