Vendia’s Tim Wagner, Shruthi Rao on enterprise blockchain

The promise of an enterprise blockchain was not lost on CIOs—the idea that a database or API that could keep enterprise data consistent with their business partners, be they their upstream supply chains, downstream logistics or financial partners.

But while it was one of the most anticipated and hyped technologies in recent times, blockchain has also been one of the most unsuccessful 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 absolutely gone through this amazing hype cycle. We’re in that post 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 address these issues, he and co-founder Shruthi Rao, Vendia’s chief business officer, reimagined the idea of ​​blockchains and distributed ledgers in a cloud-based way and launched Vendia in 2020. Its fully managed and serverless Vendia Share platform for building real-time, decentralized computing applications allows customers to more easily share code and data across clouds, companies, geographies, accounts and technology stacks.

Reimagining the idea of ​​blockchains and distributed ledgers in a cloud-based way, Shruthi Rao and Tim Wagner launched Vendia in 2020.Photo: Vendia

“We have this thesis here: Cloud was always the missing ingredient in blockchain, and Vendia added it,” Wagner said. “We took this very different approach, this very cloud-friendly, cloud-scaling approach to building it, so 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 power It enables us to do things that conventional blockchains cannot: [Deliver] much higher throughput, lower latency, more processing power, much more parallelism, easier integration.”

Vendia has received $50 million in funding to date. Their clients range from start-ups to large mid-market and enterprise businesses across markets, such as paying roaming charges in Africa and Asia for telecom providers; airline supply chains; large-scale construction management; and mortgages, hospitality and the automotive industry. 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 staring at the high cost of building everything 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 to ensure that your data and that of your partners is always correct, consistent, complete and up-to-date.”

The AWS connection

Before starting Vendia, Rao had been the head of business development for blockchain at AWS, including the Amazon Managed Blockchain product that supports the open source HyperLedger Fabric. Wagner had used 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 summarize it as just saying that 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 a big story about why they were “desperately” trying to use blockchains, according to Rao. Customers said they had many partners, invested in many data generation mechanisms – from IoT and mobile to edge computing and digital transformation – but the vast amounts of data produced by these activities were 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 amount of time so we can respond quickly to changes in the market,'” Rao said. “Regardless of how much investment they’ve made in AI and ML and analytics and all these wonderful data-crunching mechanisms, they only got a tiny sliver of data.”

“I would sum it up as just saying that 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 ran some of the largest regulated distributed ledgers in North America.

“I had this just sad realization that while cryptocurrencies and distributed ledgers sort of worked for speculation, they didn’t really work for business,” he said.

Before joining Coinbase, Wagner spent about six years at AWS, starting what is now known as its serverless division — which included AWS Lambda, its serverless computing 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 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 it works. We deliver it the SaaS way. They don’t have to deploy it, and frankly, they don’t even 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 urgency”

Vendia was launched shortly after the start of the coronavirus pandemic, which further highlighted the company’s supply chain challenges and pressure on the travel industry, particularly airlines.

“It took what was already a wonderful kind of addressable market for us and added a sense of urgency to the business,” Wagner said. “[It] created even more awareness and focus on the limitations and lack of appropriate data sharing mechanisms, needs and requirements for data sharing across companies. The focus on cost cutting and efficiency and passenger experiences, corporate travel and the need for businesses to be able to re-plan travel – some of these have actually been very beneficial to us.”

One of Vendia’s airline customers has around 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 will fly the passenger from San Francisco to Dallas, and one of the partners will then handle the leg from Dallas to Cancún.

The first passenger booking would come to the airline through the Salesforce CRM system. In order to convey the necessary information to the joint venture partner handling the flight from Dallas to Cancún, Vendia’s customer previously downloaded their Salesforce data into an Excel spreadsheet and cleaned up some of the macros so that it only shared information that the partner needed to see, for example, the travel segment, the passenger’s name, the passenger name’s postal code, the date, the seat number and other details. It will then send the information to the partner, who may use another CRM system.

“I had this just sad realization that while cryptocurrencies and distributed ledgers kind of worked for speculation, they didn’t really work for business.”

“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 and segment sharing partners … Point-to-point-to-point the integration, especially on these complex flights, becomes that much more difficult,” Rao said.

Instead, Vendia Share takes care of orchestrating the data sharing between 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 whoever is going to get the data gets the data in real-time, within five milliseconds, so there’s no manual back and forth,” 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 a 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 engineering and continue to build out its cross-cloud platform, including support for Google Cloud Platform.

“It’s just this general idea of ​​meeting customers where they are: the cloud they’re on, the APIs or data access they prefer to use, the systems they have their data in, like Salesforce, for example,” Wagner said. “On the market side … we’ve pushed into the automotive industry, into the travel sector and financial services — that’s kind of where we started — and they all have some really amazing business networks and use cases that we can tap into. But they are equally exciting and challenging opportunities in healthcare, in energy and consumer goods, and many of these other areas as well. To get there, we need a bigger go-to-market team and more security. So that would be the other option: to use these funds to grow and expand our sector penetration.”