In an apparent first, global online payments firm PayPal has made an investment in a blockchain startup — one that focuses on leveraging the technology to give users more control over their digital identities. The news was reported by Forbes on April 2.
The investment comes as part of an extension to a Series A funding round in the startup — called Cambridge Blockchain — that first raised a total of $7 million in May 2018.
While neither PayPal nor Cambridge Blockchain have disclosed the size of the payments giant’s investment, recent filings with the United States Securities and Exchange Commission reveal that Cambridge Blockchain has raised $3.5 million in fresh equity over the course of the nine months since May 2018.
According to Forbes, Cambridge Blockchain’s May 2018 Series A had included participation from blockchain-focused VC firm Digital Currency Group, the VC arm of Taiwanese iPhone manufacturer Foxconn and tech investment firm Partech Ventures.
The $3.5 million for the Series A extension includes a new investment from self-described philanthropic investment firm Omidyar Network, alongside PayPal.
In regard to PayPal’s foray into blockchain-powered digital identity management, an unnamed PayPal spokesperson is cited by Forbes as saying that:
“We made an investment in Cambridge Blockchain because it is applying blockchain for digital identity in a way that we believe could benefit financial services companies including PayPal.”
Cambridge Blockchain has notably joined major players such as Microsoft, IBM, Mastercard, and Accenture to collaborate under the canopy of a non-profit organization dubbed the Decentralized Identity Foundation.
Notwithstanding Cambridge Blockchain’s broad gamut of blockchain-powered digital identity projects, PayPal will focus its exploration of blockchain for financial applications, the spokesperson reportedly further noted.
According to Forbes, Cambridge Blockchain will use the Series A and extension funding on research and development, as well as expanding its workforce in Boston, Paris and Beijing — the latter with the view to develop a number of projects together with Foxconn.
Forbes notes that Cambridge Blockchain CEO Matthew Commons first collaborated with PayPal as part of the firm’s co-hosted accelerator Fintech Europe 2018, which focuses on helping startups to grapple with Europe’s rigorous data privacy framework — the General Data Protection Regulation.
As previously reported, PayPal’s co-founder, Luke Nosek, has latterly remarked that the firm had initially aspired to create a digital currency that would be independent from banks and governments, similar to crypto.