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The ASX’s second blockchain IPO Identitii is up 20 per cent on debut as its shares jumped immediately from 75c to 90c.

Identitii (ASX:ID8) raised $11m from investors at a market cap of $40m, and joins Kyckr (ASX:KYK) as the ASX’s only other blockchain IPO.

Both companies follow similar strategies of making blockchain-based technology that checks the bonafides of businesses involved in financial transactions.

Sydney-based Identitii is a four-year old financial software maker that has developed a blockchain-based system called Serra that protects data — especially in international money transfers.

While cryptocurrencies have been on the nose since January — DigitalX (ASX:DCC) is fighting a lawsuit over a disappointing currency issue while Bitcoin has trailed between $US6000 and $US7000 for months — the underlying blockchain technology is drawing interest.

It’s increasingly seen as having broader applications such as securing online data and tracking valuable commodities.

Identitii is planning to use the $11m to fund further development and commercialisation of the platform, already in use by HSBC, as well as hiring.

The company took into the IPO 2017 revenues of $1.2m, largely due to a larger R&D tax refund, and a loss of $1.9m.

At the end of 2017, the latest accounts, Identitii had $276,000 in cash available after burning through $1.3m that year.

Identitii aims to tap demand for stronger data security to support so-called “Know Your Transaction” requirements to combat “terrorist financing, politically exposed persons and anti-money laundering”.

“Know Your Transaction” and “Know Your Customer” have become buzz phrases particularly since the Commonwealth Bank got caught out with breaches of anti-money laundering and counter-terrorism laws earlier this year.

“Know Your Transaction” refers to a financial institution’s need to track detailed information about transactions.

This can be a painful and expensive process — which Identitii’s Serra product aims to solve using blockchain technology.

Blockchain creates an immutable transaction record that can be used to “verify the audit trail of changes that have been made to the information”, says Identitii.

Unlike a public cryptocurrency blockchain, Identitii uses a private blockchain system that requires permission to access.

The system generates unique ‘Identitii tokens’ that can never be overwritten.