The promise of an enterprise blockchain was not lost on CIOs — the idea that a database or an API could keep corporate data consistent with their business partners, be it their upstream supply chains, downstream logistics, or financial partners.
But while it was one of the most anticipated and hyped technologies in recent memory, blockchain also has been one of the most failed technologies in terms of enterprise pilots and implementations, according to Vendia CEO Tim Wagner.
“We sometimes joke at Vendia that we love nothing better than a failed blockchain experiment,” Wagner said. “Blockchain has certainly gone through this amazing hype cycle. We’re in that post trough-of-disillusionment phase. Probably half of our deals in the last year are replacements of failed blockchain attempts.”
The operational challenges of blockchain technology, including single-machine limitations, lack of throughput and scalability, high costs, and the difficulty of integration, meant that many pilots failed to deliver value, according to Wagner.
To solve those problems, he and fellow co-founder Shruthi Rao, Vendia’s chief business officer, reimagined the idea of blockchains and distributed ledgers in a cloud-native way, launching Vendia in 2020. Its fully managed and serverless Vendia Share platform for building real-time, decentralized data applications allows customers to more easily share code and data across clouds, companies, geographic regions, accounts, and technology stacks.
Shruthi Rao and Tim Wagner reimagined the idea of blockchains and distributed ledgers in a cloud-native way, launching Vendia in 2020.Photo: Vendia
“We have this thesis here: Cloud was always the missing ingredient in blockchain, and Vendia added it in,” Wagner said. “We took this very different approach, this very cloud-friendly, cloud-scaling-type approach to building it, so at the core of our technology is a cloud-centric blockchain. By building it in the cloud, we have access to essentially unlimited amounts of storage, unlimited amounts of network capacity, unlimited amounts of processing capacity. That makes it possible for us to do things that conventional blockchains can’t: [Deliver] much higher throughput, lower latency, more processing power, lots more parallelism, easier integration.”
Vendia has received $50 million in funding to date. Its customers range from startups to large mid-market and enterprise companies across markets such as settling roaming charges in Africa and Asia for telecom providers; airline supply chains; large-scale construction management; and the mortgage, hospitality, and automotive industries. They include BMW, Aerotrax Technologies, and consulting firm Slalom.
“We typically replace early attempts to use Hyperledger Fabric or Quorum or one of these other systems,” Wagner said. “But a lot of it, frankly, is companies who are staring at the high cost of building it all out in a custom way through a custom development in-house or outsourced versus trying to get it as a platform. One of the hardest things a company can do is ensure that their data and their partners’ data is always correct, consistent, complete, and up to date.”
The AWS connection
Prior to starting Vendia, Rao had been head of business development for blockchain at AWS, including its Amazon Managed Blockchain product that supports the open-source HyperLedger Fabric. Wagner had been using the same technology at cryptocurrency company Coinbase.
“The interesting question we kept asking ourselves was, ‘What’s the problem, what’s the missing ingredient here?’” Wagner said. “I would sum it up simply as just saying this first generation of blockchain technology ignored the cloud. They ignored scalability, they ignored cloud integration, they ignored the fact that everyone else was migrating to the cloud.”
Rao said she met 1,092 unique customers while at AWS. No matter what industry they were involved in — financial services, energy, media, entertainment, gaming — they all had one big story of why they were “desperately” trying to use blockchains, according to Rao. The customers said they had many partners, invested in lots of data-making mechanisms — from IoT and mobile to edge computing and digital transformation — but the enormous amounts of data produced by those activities were getting stuck in partner and cloud silos.
“For these companies, the problem was, ‘We’re not getting access to our data that we need to make real-time decisions in a meaningful time so we can respond to market changes rapidly,’” Rao said. “Irrespective of how much investments they’ve made in AI and ML and analytics and all of these wonderful data-crunching mechanisms, they were just getting a small sliver of data.”
“I would sum it up simply as just saying this first generation of blockchain technology ignored the cloud.”
Wagner, meanwhile, had been vice president of engineering in 2018 and 2019 at pre-IPO Coinbase, which was running some of the largest regulated distributed ledgers in North America.
“I had this just sad realization that while cryptocurrencies and distributed ledgers were sort of working for speculation, they didn’t really work for enterprises,” he said.
Before joining Coinbase, Wagner spent about six years at AWS and started what’s now known as its serverless division — which included AWS Lambda, its serverless compute service — with Rao eventually running business development for the group.
“When I created Lambda, it was about democratizing and simplifying access to the cloud versus going and renting a server from AWS,” Wagner said. “We kind of think of Vendia as a similar idea: It’s about democratizing and simplifying blockchain capabilities for customers who then don’t really have to understand how that works. We deliver it in the SaaS fashion. They don’t have to deploy it, and frankly, they don’t even really have to understand it. They can get the business value out of it without necessarily becoming experts in writing solidity or hiring Hyperledger Fabric developers or any of those pieces.”
‘A sense of business urgency’
Vendia launched just after the start of the coronavirus pandemic, which further highlighted corporate challenges in the supply chain and pressure on the travel industry, particularly airlines.
“It took what was already a wonderful sort of addressable market for us and added a sense of business urgency,” Wagner said. “[It] created even more of an awareness and focus on the limitations and lack of appropriate data-sharing mechanisms, of cross-company data-sharing needs and requirements. The focus on cost-cutting and efficiency and passenger experiences, corporate travel, and the need for corporations to be able to replan their travel — some of those have actually been very beneficial for us.”
One of Vendia’s airline customers has about eight joint-venture partners to get passengers to their destinations. When a customer books a flight from San Francisco to Cancún, Mexico, for example, that airline would fly the passenger from San Francisco to Dallas, and one of its partners would then handle the Dallas-to-Cancún leg of the trip.
The initial passenger booking would come to the airline through its Salesforce CRM system. To convey needed information to its joint-venture partner handling the flight from Dallas to Cancún, in the past, Vendia’s customer would download its Salesforce data into an Excel spreadsheet and clean up some of the macros so it only shared information that the partner needed to see, such as the trip segment, the passenger’s name, the passenger name record number, the date, seat number, and other details. It would then send the information to the partner, which could be using a different CRM system.
“I had this just sad realization that while cryptocurrencies and distributed ledgers were sort of working for speculation, they didn’t really work for enterprises.”
“It’s all very manual, it’s all very duct-tapey, and throw in the fact that they have eight joint venture partners and many, many more code-share and segment-share partners … The point-to-point-to-point integration, especially on these complex flights, becomes that much harder,” Rao said.
Vendia Share instead takes care of orchestrating the data-sharing among the different airlines. The product enables businesses to have full visibility into all activities and transactions without worrying about their origin, as transactions are immutable through the power of distributed ledger technology, according to Rao.
“We make sure that whoever is supposed to get the data gets the data in real time, within five milliseconds, so there’s no back and forth of manual movement,” Rao said. “And everything is on the ledger so you can see who you shared [with], what you shared, when you shared … and you can do fine-grained analysis of what has been shared.”
Support for AWS is generally available, support for Microsoft Azure is in beta, and Google Cloud Platform support is targeted for the first quarter, according to the company.
Vendia announced its latest funding, a $30 million Series B round, led by NewView Capital, in May. The company, which has just under 100 employees, is using that money to scale its engineering and continue building out its cross-cloud platform, including support for Google Cloud Platform.
“There’s just this general idea to meet customers where they are: the cloud that they’re on, the APIs or data access that they prefer to use, the systems that they have their data in, like Salesforce, for example,” Wagner said. “On the go-to-market side … we’ve pushed into automotive, into the travel sector and financial services — that’s kind of where we got started — and they all have some really amazing business networks and use cases for us to tap. But they’re equally exciting and challenging opportunities in health care, in energy and consumer goods, and lots of these other spaces as well. To get there, we need a larger go-to-market team and more collateral. So that’ll be the other opportunity: to use those funds to grow out and expand our sector penetration.”