R3 Corda: A Distributed Ledger Technology for Financial Services
(11 pages of text)
In December 2016, the founder and chief executive officer of R3 was preparing for an offsite meeting, where his management team would debate what business model to pursue to extract the most value from the company’s new distributed ledger product called Corda. Founded in 2014, R3 was a blockchain technology company with headquarters in New York. R3 was leading a consortium of over 100 banks, financial institutions, and technology companies to develop a distributed ledger technology that could meet the needs of the financial services industry. R3 had run a number of proof of concept tests of existing distributed ledger technologies with its bank members before deciding to develop an enterprise-grade distributed ledger from scratch. R3 was still privately-owned and controlled by the founder, but had financed its research and development by selling memberships in a joint venture to a consortium of over 40 banks. With Corda operational by mid-2016, the founder had to decide what business model to follow to monetize the investment in Corda. A second question was how to finance R3’s future growth.
This case is suitable for an undergraduate or graduate-level course on entrepreneurship, financial technology (fintech), or banking and information technology. It may also be used in computer science or engineering programs that are looking at how to create and fund a technology start-up. The case introduces students to fintech, distributed ledger technology, blockchain and bitcoin, and the world of technology start-ups. It also introduces concepts of strategy, innovation, technological disruption, and venture financing. After completion of this case, students will be able to
- learn about fintech, distributed ledgers, blockchain, and cryptocurrencies such as bitcoin;
- examine a new business model and determine a strategy to maximise the value it creates; and
- understand why and how an experienced banker disrupts a traditional industry.
Finance and Insurance
United Kingdom; United States, Medium, 2016
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