New York-based blockchain startup R3CEV is currently in negotiations to raise a Series A funding round, people familiar with the group’s plans have told CoinDesk.

The source, who couldn’t speak on the record due to the sensitivity of the topic, said that R3 had been given a $200m pre-valuation according to an independent report carried out by Ernst & Young as part of the consortium’s contract with its members.

The $200m figure relates to a valuation prior to any investment made by outside investors, which could significantly increase the group’s valuation.

Asked about the reports, R3’s managing director Charley Cooper said the group “doesn’t talk about our funding process publicly”.

Cooper did confirm the group is holding a meeting of its partners in London on Tuesday and admitted that there was potential for funding to become a topic of conversation, though it is not an official item on the program.

He told CoinDesk:

“It is not formally on the agenda [but] will different people bring it up? It’s obviously possible.”

Along with potential discussions about funding, the meeting this week will also address a number of other important issues for R3’s clients including its research work and its newly revealed Concord platform.

The group’s product team will also discuss various proof of concepts and use cases which are currently in the incubation stage and which may end up being spun into products.

Valuing innovation

Of course, putting a valuation on blockchain-based companies is difficult given the nascent nature of the technology.

While Cooper would not be drawn on any potential fundraising efforts or a specific valuation, he did say that unlike a lot of tech startups, R3 offers much that could make it worthy of investor interest.

“We are not three guys in a garage, we are not a Silicon Valley startup… We are 80 people with offices in eight cities, 66 clients, already developed a prototype version of our distributed ledger platform, we already have got products in design phase,” he said.

R3 currently has 66 clients, it’s most recent member South America’s biggest stock exchange BM&F Bovespa, based in Brazil — signing up last week.

So far, 35 of those have confirmed to attend the London meetup, one of a series of meetings the groups holds in different locations around the globe during the year, Cooper said.

Path forward

Still, the source said that the decision to raise funds had not yet been finalized, and that it could always extend the advisory services agreement under which it currently operates with its partners.

It is unclear exactly what any funding would be used for as it is understood that R3 is generating revenue from its partners. Funding could, however, allow the consortium to expand at an even faster rate than they are already depending on how ambitious the group’s plans are.

At least some of the money would likely be invested in hiring more talent the source revealed. Because R3 has expanded to add clients in locations in all corners of the globe, it needs to hire more people in specific locations.

In the last 12 months, the group has grown from just eight employees to 80 with offices now spread across the globe. Along with its headquarters in New York, the company has established presences in San Francisco, London, Japan, Zurich, Singapore, Seoul and Sydney.

As well as its official operations, R3 also has remote employees who operate independently from locations spread across the globe.

This distributed workflow means the group does not have to invest heavily in servers, buildings or facilities, meaning it should not need huge amounts of capital, Cooper said.

New updates

The meeting comes at a time when R3 has been more vocal about its work in the face of escalating announcements from similar consortium efforts.

For example, R3 recently filed a patent for its own distributed ledger technology platform, which it is building in collaboration with the banks and financial institutions. The platform, called Concord, bears similarity to public blockchains like bitcoin and ethereum but differs in one significant aspect, transactions are not stored publicly.

While many in the industry face concerns over finding sufficiently qualified candidates, Cooper says this is not something that R3 has faced.

“Because we have created this center of gravity in the financial services industry and we have so many clients looking to develop we’ve ended up becoming the first de facto stop from anyone who wants to work in this space seeking a job,” he said.

Also on the agenda is the topic of regulation, one that could be of increasing concern as R3 looks to move from POCs to real-world applications.

Cooper concluded:

“We spend time with our legal and regulatory folks talking about what we have learned from various different regulators around the world as well as what regulators are working with us or in our lab and running experiments.”

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