Los Angeles based startup Spring Labs raised $14.75 million in early stage investment. Leading the seed funding round is venture firm August Capital. Other investors include GreatPoint Ventures, Jump Capital, private equity firm Victory Park Capital and crypto asset manager Multicoin Capital. The blockchain startup is aiming to help financial institutions with identity verification. Spring Labs CEO and Founder Adam Jiwan is trying to solve financial data security.
Addressing Financial Data Security
Using blockchain technology, Spring Labs is working on creating a more secured data platform that exists on a distributed-ledger. This will allow multiple companies and individuals to maintain replicas of a network. The aim of the new platform is to prevent a repeat of the 2017 Equifax hack which affected nearly 150 million consumers. With the new platform, it will prevent the single point-of-failure architecture present in the Equifax hack.
Another problem that the new platform will address is inefficiency. According to Adam Jiwan, the credit application process for consumers is a little bit clunky. When consumers apply for loans, they have to undergo identity verification through a series of “manual repetitive processes.” When applying for credit, consumers need to mail three separate documents. The new blockchain platform will aim to streamline the process by getting financial institutions to share identity with each other in a secure way.
Tapping A Potentially Huge Market
A Spring Labs spokesperson reveals that the company is pursuing a potentially huge market. This is one of the reasons why August Capital was confident enough to invest on Spring Labs. The venture capital’s General Partner Eric Carlborg says that there is a huge interest in blockchain right now. High profile projects such as Civic and Boom are likewise creating a new blockchain based identities for people to power faster and more secured verification. In the case of Spring Labs, they are not building identities but helping financial institutions in certain aspects of identity verification. Spring Lab is August Capital’s first blockchain startup investment.
The Spring Network Difference
Spring Lab’s blockchain platform shall be called Spring Network. It will start as a “permissioned” blockchain where only certain trusted financial institutions can join the network to view and share data. Jiwan’s former company Avant was the first to participate with other companies following suit. As more institutions join, Spring Network will become a public blockchain allowing individuals to share credit data and control their identity profile.
Spring Labs will be publicly launched in 2019 and will have its own token, which will be used as a medium of exchange for institutions and individuals.