Blockchain trade finance network Marco Polo is insolvent – Ledger Insights

Earlier this week, the holding company of Marco Polo trade finance network (formerly TradeIX) filed for insolvency in Ireland. At one point, the blockchain network had more than 30 bank members such as Commerzbank, BNY Mellon and SMBC, and backers included ING Ventures and BNP Paribas. A potential $12 million deal with Bank of America recently fell through, and the company was unable to find replacement investors.

As part of the Bank of America deal, Marco Polo’s technology would have been integrated with the bank’s internal systems, according to the Irish Examiner.

The company’s liabilities exceed its assets by 2.5 million euros ($2.6 million). Total debt amounts to €5.2 million ($5.5 million), and revenues owed €2.6 million ($2.7 million).

The latest financial statements filed are for 2021, which showed a loss of nearly $29 million and cumulative losses of $85 million. The largest external shareholder is Kistefos, followed by Japan’s SBI, ING, SMBC and BNP Paribas.

This is the second failed blockchain trade finance network after bank-backed we.trade went bankrupt in Ireland in mid-2022. Additionally, at the end of last year, IBM and Maersk shut down their TradeLens blockchain platform.

After the demise of we.trade, there was a lot of talk about Marco Polo’s slow approach. After launching the network in late 2020, more than six months passed before the first banks went live in 2021. But activity failed to accelerate.

The other two blockchain trade finance companies are Contour and komgo. Both firms have specialized target markets compared to the others, with komgo first targeting raw materials and Contour starting by focusing on letters of credit. Komgo recently acquired Canada’s GlobalTrade Corporation, bringing 120 multinational clients onto the platform.

Earlier this month, the entire digital trade sector received a boost when all the major container shippers committed to adopting electronic bills of lading (eBL). Half of all bills of lading will be electronic within five years and 100% after ten years. That’s especially good news for Contour and other blockchain trading networks like GSBN and TradeWaltz.

Marco Polo ranks as the sixth high-profile enterprise blockchain failure in the past year. All started around 2016 and 2017. In most cases, the problem was a failure to achieve market fit and scale before the money ran out, rather than any particular blockchain technology.

Marco Polo and insurance network B3i both used R3’s Corda. We.trade and TradeLens were based on Hyperledger Fabric. The ASX CHESS project used DAML and VMWare Blockchain. And Symbiont used its own proprietary technology.

Update: The figures for 2021 losses were added and the largest external shareholders