Applied Blockchain Inc files for $60M IPO
Applied Blockchain, a London-based blockchain startup is looking to raise $60 million through an Initial Public Offering (IPO) on the London Stock Exchange’s Alternative Investment Market.
According to a Friday filing with the U.K.’s Financial Conduct Authority, Applied Blockchain plans to issue 60 million shares at $1 each, which would give the company a valuation of $60 million should the IPO be successful.
Applied Blockchain Inc, a London-based company that helps firms implement blockchain solutions and create smart contracts for their businesses, has filed for an IPO on the Nasdaq.
The company, which is majority owned by investment firm Lee & Co., wants to sell 3 million shares at $20 each, raising US$60 million.
Applied Blockchain says it is developing a blockchain-based software product called Applied Blockchain Platform (ABP). ABP is a multi-tenant platform that enables users to build and deploy their own blockchain applications. The software is also available as a managed service, in which case the company provides consultancy services to its clients using the ABP. Applied Blockchain has also raised additional funding from third parties, including angel investors.
Applied Blockchain was founded in 2017 and has since helped companies such as The Royal Mint build blockchain platforms to help them verify transactions and create digital assets.
The company says it also provides consulting services to help clients better understand the emerging technology, including how it can be used to improve their businesses and what regulations need to be followed.
The company, founded in 2017 by a pair of former Goldman Sachs bankers, says it has developed “a patent pending platform that streamlines and accelerates the development, deployment and management of blockchain applications using industry standard tools and technologies, allowing businesses to develop their own blockchain applications without needing any specialist coding knowledge.”
The company’s prospectus says it will use the proceeds of the IPO to fund expansion and sales efforts in North America, Europe and Asia. It also plans to invest in product development. The company has not yet applied for a listing on the TSX Venture Exchange, as it is still working on its preliminary prospectus.
Applied Blockchain was founded in 2017 by former Goldman Sachs executive Shaun Maishman and Daniel Gervais, who is also a professor at Vanderbilt University Law School. Its platform is used for functions like clearing and settlement, as well as trade finance and digital identity management.
The company currently has one major customer — BMO Capital Markets (BMO Financial Group’s investment banking subsidiary) — which uses Applied Blockchain’s platform to automate capital call and distributions processes among investment funds and their limited partners.
Last year, the company released its first product, a “smart contracts” platform designed to help businesses integrate blockchain into their operations.
In addition to financial services firms, Applied Blockchain has also found customers in industries such as music and supply chain management. The company said it is already working with a number of multinational companies in these sectors, including global music rights organization ICE Services and supply chain management firm GS1 UK.
It has its U.S. headquarters in New York City, where it employs five of its 45 staff members. The firm plans to become a publicly traded company through a merger with Arc Acquisition Corp., a SPAC that went public in August 2019 at $10 per share (currently $13). Bank of America Securities and Guggenheim Securities are the joint bookrunners on the deal. No pricing terms were disclosed.
Applied Blockchain is one of several companies which have been working on bringing blockchain technology to mainstream enterprise use cases. Other players include Consensys, Axoni and Blockstream.
Applied Blockchain applies blockchain technology to a variety of industries including supply chain, trade finance, asset management and property management. It uses Hyperledger Fabric, an open-source blockchain platform hosted by the Linux Foundation, as well as Ethereum, a decentralized public blockchain platform that enables smart contracts and decentralized applications (dApps).
Applied Blockchain describes itself as “a technology innovation company specializing in helping enterprises and new ventures design, prototype and implement solutions using distributed ledger technologies (DLT) such as blockchain and smart contracts” with offices in London and Singapore.
Applied Blockchain’s software has been designed to allow businesses to store blockchain data on their own networks instead of the public cloud, helping to improve security.
The company sells services aimed at companies that want to use blockchain technology, with three main categories: software development, enterprise-level management and consulting services. The latter includes “end-to-end solutions” that combine various levels of the technology with other services like risk management, cybersecurity, data analytics and compliance.
The company said it has built more than 20 blockchain applications for corporate customers including HSBC Holdings PLC and Aetna Insurance Co., one of the largest health insurers in the U.S. Applied Blockchain claims it generated $1 million.
Applied Blockchain says it is currently working on blockchain technology projects with major global clients including Microsoft and Hitachi. The company also provides education programmes in conjunction with London School of Economics, Cambridge University Judge School of Business and MIP Politecnico di Milano Graduate School of Business.
The filing lists both Applied Blockchain’s strengths and its financial shortcomings since the company was founded in 2016.
Below are some of Applied Blockchain’s achievements:
The filing shows Applied Blockchain has seen positive revenue growth over the last two years.
However, the company has yet to turn a profit and is not expected to do so in 2020 or 2021.
For the six months ending September 30, 2020, Applied Blockchain lost $3.9 million and had no revenue, compared to a loss of $1.7 million and revenue of $0.8 million a year earlier.
In conclusion, Applied Blockchain is a firm that has been around for several years and has developed many different solutions. It has grown from just two people to over 60 employees, and it is now looking to go public.
The company seems to be well funded, as it has some big names behind it. However, the company does not have much of a track record when it comes to raising money or going public.