we.trade now counts IBM among its shareholders, as the blockchain-based platform for open account trade seeks to expand its operations around the globe.
Powered by Hyperledger Fabric and built by IBM, we.trade is designed to improve the trade finance lending process, supporting companies as they grow their business and expand into new markets. Since registering as a standalone legal entity in 2018, the platform has largely focused on managing, tracking and protecting open account trade transactions between SMEs in Europe, although it has also been seeking to interoperate with other distributed ledger-based trade finance networks, such as Hong Kong-based eTradeConnect.
GTR reported in September last year that we.trade was in discussions with IBM about the potential of it becoming a shareholder. In an exclusive interview, Ciaran McGowan, the platform’s CEO, said: “We are looking to open up to any other interested party. It would make sense if it’s a value-added service provider or partner, who can earn and generate revenue for themselves on the platform. We’d much prefer a company like that to invest in we.trade rather than a venture capital firm.”
we.trade has not disclosed the amount of the investment by IBM, but David McLoughlin, the platform’s head of commercialisation, tells GTR that the tech giant has taken a 7% stake in the platform, as part of what we.trade calls “an enhanced collaboration” between the two sides.
Jason Kelley, general manager of blockchain services at IBM, says that the strategic direction for we.trade and IBM is focused “on driving growth and transparency across the entire trade ecosystem, collaborating to enhance the network effect of blockchain, and expanding access to trade finance and other services to the market place”.
Up until now, we.trade has been completely funded by its shareholder banks, which include CaixaBank, Deutsche Bank, Erste Group, HSBC, KBC, Nordea, Rabobank, Santander, Société Générale, UBS and UniCredit. we.trade’s underlying governance, whereby no single shareholder bank has a greater say than another, has been key to its success, as Parm Sangha, global blockchain leader for trade and trade finance at IBM, told GTR recently.
“Banks prefer to connect to a neutral entity and not join another bank’s platform. Otherwise it introduces a perception of bias,” he said. “If you get bias, then you’re going to hit an asymmetrical data problem, which is a case of, ‘I want to share data with you, you want to share data with me, we know it’s good for both of us because it gives us good value, but how do I know you’re not going to derive more value from it than me?’”
Although IBM – we.trade’s sole technology partner since its inception – is now taking part ownership of the platform as well as providing the technology it runs on, McLoughlin stresses to GTR that this does not mean that IBM will hold greater control than other members of the consortium.
“This [investment] is a reflection of the endorsement and opportunity that IBM sees in we.trade,” he tells GTR, adding: “That argument could have been made 12 months ago, when we only had seven staff members. The intellectual property (IP) of the platform is owned by we.trade, not IBM, and we have our own team of 30 in Dublin, 80% of which are tech developers.”
With IBM’s investment, we.trade says it will now extend services to additional banks and clients across Europe before further developing its global network, starting with Asia.
May 22, 2020