GSR Capital, a Chinese private equity firm is set to establish what would become the largest ever single investment in a blockchain platform. The investment by GSR Capital will see it acquire about 3.1 million shares of US-based Overstock, amounting to about 10% in overall shares of the company.
A Fragmented Procedure
As contained in a letter of intent as confirmed to Forbes, GSR Capital will invest as much as $270 million to acquire 18% of tZero platform in the initial stage of the investment. Afterwards, the company shall pay another $104.55 million for the already mentioned 10% stake in Overstock.
The platform tZero is a subsidiary of Overstock that enables the trading of public and private securities issued on a blockchain. In tZero’s ICO, GSR Capital yet plans to inject another $30 million as additional investment, making up the total amount raised to $134 million.
Cumulatively the total amount involved in this transaction could reach $404 million, raising the valuation of tZero to $1.5 billion as early as December 15 2018, all things being equal.
This fragmented deal involves a couple of independent letters of intent signed by all parties involved in what the executive chairman and CEO of Overstock.com, Patrick Byrne describes as a parabolic “Wedding Cake”.
According to Byrne, independent letters of intent were signed by GSR and tZero, and GSR and Overstock. Three other invested are also expected to be announced soon coming from Asia and the Middle East.
Although based in the United States, Byrne notes the difficulty in raising capital at home as a key reason why offshore investments appear to be leading in terms of the firm’s capitalization processes. This is the reality even with a fully registered and SEC-licensed company like Overstock.
“U.S. capital is, to be honest, they’re gun shy on this whole blockchain issue, and I’m sorry to say the US is not the leading country in the world”, says Byrne
Byrne continues by making known the plans of tZero to spend raised funds in rolling out multiple tokenized securities exchanges around the world in parallel with its SEC-licensed U.S. operation.
This exercise records another milestone for blockchain in its adoption by mainstream establishments. It is the first blockchain experience for GSR Capital in terms of public investment, having been popular for its investments in the areas of electric vehicles and clean energy.
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