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Tzero Misses Target for $100 Million Capital Injection


TZERO, the blockchain subsidiary of retail giant Overstock, recently announced that it missed its mid-April goal for a $100 million fund raise from Chinese investment firm GSR Capital and Singaporean private equity firm Makara Capital. The firm announced the news in a shareholder letter on April 18.

Overstock CEO Patrick Byrne noted in the letter that while the diligence processes for both firms were on point, the parties will not be signing a deal by the mid-April target.Byrne added:

“tZERO plans to continue facilitating Makara’s diligence, but is not under any exclusivity with Makara or GSR and has retained advisors to pursue parallel alternatives.”

The $100 million target, $30 million of which also consists of  a binding tZERO security token purchase agreement between GSR and Overstock, was due to a  Memorandum of Understanding signed between the firms in March.

The investment  first came to light in August 2018, at which time GSR Capital intended to invest up to $404 million: $270 million for up to 18 percent of tZERO’s equity at a valuation, Byrne reassured shareholders:

“I remind shareholders of the $30 million binding tZERO security token purchase agreement between Overstock and GSR…. Under that agreement, GSR has a binding $30 million funding obligation for May 6.”

In mid-January, the tZERO security token trading platform went live for secondary trading, with Dinosaur Financial Group acting as a broker-dealer.

With several firms launching security tokens and going blockchain, 2019 is predicted to be a game changer for cryptocurrencies.

As per a new study by International Data Corporation (IDC), a United-States based market research firm, Global blockchain spending will count for almost $2.9 billion in 2019.

This depicts an 88.7% increase form 2018. The report also provided an in-depth analysis of blockchain developments in various segments.

The report also states, when it comes to building use cases, cross border settlements and trade finance are expected to receive over $738 Million.

Whereas, distribution services and manufacturing are forecasted to spend $653 Million and $642 Million over blockchain respectively in 2019.

Considering geographic terms, US will see the largest blockchain spending of $1.1 Billion. Furthemore, Western Europe and China are predicted to invest $674 million and $319 million respectively.

Per the report, the financial sector will lead the industry when it comes to allocation of funds in blockchain development. Also, investment services, banking and insurance services are predicted to invest more than $1.1 Billion in the global blockchain spending motives.