Factom raises $4.2m to develop blockchain-backed data security
Blockchain technology company, Factom, has secured $4.2m in funding from a group of investors led by billionaire investor Tim Draper. Factom's Apollo and Iris products help to keep identities and records secure, a crucial requirement for governments and organisations concerned about hacking. Draper said Factom avoids critical failures due to user error or hackers by decentralising data through the blockchain. Paul Snow, chief architect and co-founder of Factom, said the company's protocol would have the "same kind of impact on data and systems as the first revolution had on value".

The blockchain technology startup powers the digital currency bitcoin and enables data-sharing across a network of individual computers.

This story originally appeared on Reuters

Texas-based Factom Inc., a blockchain technology company that secures data, said on Wednesday it has raised $4.2 million in financing from a slew of global investors led by billionaire investor Tim Draper.

Blockchain technology powers the digital currency bitcoin and enables data-sharing across a network of individual computers. It has gained worldwide popularity due to its perceived usefulness in recording and keeping track of assets across practically all industries.

Factom Apollo and Factom Iris are products built on the company's open source. They have developed ways to use the blockchain to keep records and identities more secure.

"Blockchains first pushed the boundaries of computer science with the simple yet revolutionary ability to trade digital value openly," said Paul Snow, chief architect and co-founder of Factom in a statement.

"Now we are pushing the limits of computer science in a second revolution. The Factom protocol allows for the open coordination of processes against immutable ledgers of data. It will have the same kind of impact on data and systems as the first revolution had on value."

Draper said data security is a key issue among governments, banks, car companies, credit card companies, retailers and any organization concerned about hacking.

"By decentralizing data through the blockchain, Factom avoids critical failures due to user error or hacker," he added.

Draper has been one of the earliest backers of bitcoin companies.

Other investors in the funding round included BnkToTheFuture, a global online investment platform focused on financial innovation and technology.

China-based Fenbushi Corporation and Fenbushi Investment Fund also invested in Factom. The group runs a venture capital firm that exclusively invests in blockchain-enabled companies.

(Reporting by Gertrude Chavez-Dreyfuss; Editing by David Gregorio)