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R3 Not Going Bankrupt, in a Very Strong Financial Position: CEO David Rutter

Last Updated March 4, 2021 5:08 PM
Josiah Wilmoth
Last Updated March 4, 2021 5:08 PM

The chief executive of R3 is striking back at a recent report that the enterprise blockchain startup is hemorrhaging cash and is well on its way to bankruptcy.

Writing in an official statement  on the R3 blog, David E. Rutter said that the firm — which has raised more than $120 million over multiple funding rounds, is in a “very strong financial position.”

He wrote:

“R3 is in a very strong financial position. We have the widest and largest funding base in the enterprise blockchain space, having raised more than USD 120 million from more than 45 institutions and brought in over USD 20 million in revenue.”

His statement presents a marked contrast to the report, first appearing in Fortune, that R3 has struggled to turn a profit or even develop a viable business model, even as it has seen high-profile institutions such as Goldman Sachs, JPMorgan, and Santander exit its banking consortium.

The report cited anonymous former employees who said that R3’s revenue has been “laughably off” targets and that people at the company expect to be out of money by the first quarter of 2019.

Rutter said that these statements were “false, malicious rumors” and denied that R3 has wasted its funding.

“We’ve always been very sensitive of operating as cost-efficiently as possible, and in fact our average operating expenses per employee has declined each year since launch. We pride ourselves on continuously monitoring, evaluating and trimming expenditures to deliver maximum value for our shareholders.”

As CCN.com reported, R3’s open-source Corda software was recently deployed by AP Moller — Maersk, the world’s largest shipping company, to create a blockchain platform for marine insurance.

Last year, R3 partnered with nearly two dozen members of its banking consortium to launch a cross-border payments platform based on Corda.

Meanwhile, the firm is currently embroiled in a lawsuit with Ripple stemming from a failed partnership between the two organizations. The suit, which involves the right to purchase XRP at a rate far below the current market price, could be worth billions of dollars.

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