Private blockchain startup Gospel Technology raises £1.4m in funding from LocalGlobe

A blockchain software startup that has been working with one of the UK’s biggest aerospace and defence manufacturers to develop a proof of concept to improve record keeping for its supply chain has raised £1.4m in seed funding from investors led by LocalGlobe.

Marylebone-based Gospel has developed a way of securely distributing data across modern decentralised infrastructures. It offers companies like this major aerospace and defence company the potential to automate records for complex products that currently require significant manual management. With Gospel Technology the manufacturer can share only the information it needs to, securely, with other partners in its supply chain, potentially leading to improved efficiency and lower costs of information recall.

Founded in December 2016 by entrepreneur Ian Smith, Gospel uses a private blockchain that requires users to set up a network of “nodes” within their ecosystem. Each party controls their own node and all the nodes must agree before any transaction can be processed and put on the blockchain. The node network acts as a consensus and provides a mechanism of trust.

After a series of high profile data breaches during 2017, including attacks against some of the world’s biggest manufacturers, companies are urgently trying to find ways to securely store and share data within their suppliers, partners and customers. CEOs are under pressure to digitise their businesses, strike innovative partnerships and shift to cloud computing but as they do so, traditional centralised approaches to data security are failing them. Financial information, confidential customer records, intellectual property, metadata, and other files are all at risk from the challenge of balancing access to data with trust.

The aerospace and defence client is reviewing Gospel’s enterprise software to understand the potential of the solution within their supply chain environment. By placing all the complex manufacturing and assembly processes on a private, permissioned blockchain it is envisaged that the client could access an immutable audit trail of serialised components and their provenance. This currently involves a labour-intensive paper trail but initial trials with Gospel software could potentially reduce the identification process from several days to minutes.

Gospel has been praised as one of the first practical examples of blockchain and can be used in in industrial and enterprise settings. The Gospel ledger and the data on it can only be accessed by those who have been given authority by the data owner and comply with a number of contextual rules that make the transaction valid. Every time an approved person accesses or changes the computable ledger, the transaction is recorded, making Gospel invaluable for auditing and tracking things like supply chains.

Ian Smith, chief executive and founder of Gospel, says: “For manufacturers and other businesses dealing with critical data there is a problem of trust in data systems, particularly when there is a need to share that data outside the organisation. “With Gospel technology we can provide an immutable record store so that trust can be fully automated between systems of forward thinking businesses.”

Prior to this seed round, Gospel was backed by a number of angel investors including Gumtree co-founder Michael Pennington and Vivek Kundra, the Chief Information Officer for the US Government during Barack Obama’s administration.

Remus Brett, venture partner at LocalGlobe, says: “The problem Gospel is solving is how big companies stop critical data from being compromised when traditional ‘hub and spoke’ or centralised approaches to data security are failing them. Using blockchain technology Gospel can secure company data, thereby solving one of the biggest challenges of data trust that companies large and small face today.

The seed funding will help the company to develop its software further and it expects to double its headcount from 25 over the next 18 months. Gospel is one of the few companies in the blockchain sector with revenues and paying customers. Users are charged purely based on usage of the platform.

Smith sold his first company, Butterfly Software, which developed applications that help organisations discover, analyse and migrate data centre infrastructures, to IBM in 2012. After the sale, Smith worked at IBM for three years where he lead product management and technical sales for the systems division.

In its first year of business Gospel won the Tech Trailblazers blockchain category, hailed as a tech innovator for blockchain-based cyber security. Market intelligence company IDC called Gospel Technology the first practical enterprise application of blockchain and said its “privacy by design” data logic set it apart.

Author: Yash Hirani

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