I was interested to read recently that IBM and Comcast’s venture arm will become the largest supporters of an investment fund for startups, which will help Fortune 500 corporations use blockchain. The startup accelerator, called MState, plans to invest $25,000 to $50,000 apiece in five or six blockchain companies over the next six months. Comcast Ventures will provide funding, while IBM will supply support services to the MState startups. The other backing company is Galvanize, a technology incubator, venture fund and coding school with U.S. campuses.
“The first wave of killer apps built on blockchain are already growing explosively,” says MState Co-Founder and CEO Rob Bailey. “Cryptocurrencies built on blockchain like Bitcoin, Bitcoin Cash, Ethereum and Litecoin have collectively surged past $500B in market valuation. In 2018, we’ll see a growing number of enterprise blockchain use cases go mainstream, from healthcare applications to government, supply chain and retail to the real estate and transportation industries. But for most of these use cases to succeed, blockchain start-ups need to be able to engage well with enterprise customers.”
Companies funded by MState will be earlier in their development than the startups typically backed by IBM and Comcast, Bailey says. IBM was among the first large companies to embrace blockchain, deploying it internally and helping clients test and implement applications. Comcast is working to use the blockchain to improve the efficiency of video advertising.
“It’s complementing our strategy,” Janine Grasso, vice president for blockchain strategy and ecosystem development at IBM, said in a phone interview with Bloomberg. IBM may also end up helping entrepreneurs who don’t make the cut for MState, she said.
MState will run a six-month program at Galvanize offices in New York and San Francisco focusing on helping technical founders with all aspects of their go-to-market strategy, including product development, team building, sales, marketing, finance, business development and customer support, Baily says. A core focus will be helping start-ups in the program engage successfully with prospective enterprise customers and partners. Key to this is that MState has already built a network of 30 advisors, which include five founders who have successfully built billion-dollar tech companies, as well as a team of 25 CMOs, COOs and CROs, he adds.
The growth lab will invest in all of the companies in its program and has already made its first investment in Blockdaemon, a blockchain deployment platform. Blockdaemon helps companies roll out blockchain applications faster by letting them deploy and manage network nodes.
“There’s a massive [blockchain] opportunity in Fortune 500 companies,” Bailey says. “They don’t know which companies to work with.”
There, indeed, is growing interest among those companies in blockchain technology. For example, according to research last summer by Juniper Research, nearly 60 percent of large corporations are either actively considering, or are in the process of, deploying blockchain technology. Of the respondents from companies which have already reached the proof of concept stage, 66 percent say their company expects blockchain to be integrated into their systems by the end of 2018. Furthermore, among respondents who were prepared to state their organization’s level of investment in blockchain, 67 percent said the company had already invested more than $100,000 by the end of 2016, while 91 percent confirmed the company would be spending at least this amount in 2017.
What are your thoughts on blockchain? Is your company deploying—or actively considering deploying—the technology?