Lygon, a Sydney-based blockchain startup has raised A$12.75m ($9.4m) in a Series A funding round, Australian Financial Review reported.
Australia and New Zealand Banking Group (ANZ) led the round, which was joined by Commonwealth Bank of Australia (CBA) and the venture capital fund of Aura Group.
Other individual investors such as Lygon’s staff also participated in the round.
Founded in 2017, Lygon is a joint venture between, Westpac Banking Corporation, ANZ Bank, Commonwealth Bank, IBM and Scentre Group.
Lygon will use the proceeds to increase its headcount, further research and development, and foray into new areas such as insurance and environmental, social and governance (ESG).
The startup uses blockchain technology to solve the inefficiencies in the archaic paper-based system of offering and managing bank guarantees.
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By GlobalDataLygon’s platform is powered by IBM’s Hyperledger technology that enables ANZ, Westpac and CBA to store bank guarantees on the platform, which can be accessed by multiple users.
Lygon CEO Justin Amos told the publication that initially, the firm had planned to raise A$10m but the higher-than-expected demand led the firm to increase the size of the round.
Currently, the startup is working on digitising rehabilitation bonds, which are common in the mining industry and ensure that the government has funds to restore a mining site or quarry.
“We have a built, fit-for-purpose bank guarantee platform, but our customers are coming to us and saying they want us to do more. It is a game-changer from a customer experience perspective. In terms of bank guarantees, they were paper-based systems that are not good for anyone. They are expensive, prone to delay, and there is operational fraud everywhere,” Amos was quoted by the publication as saying.
Lygon had completed the first bank guarantee in February 2021 and by the end of June, Amos expects 90% of issuers to be on board.
