After months of delays and revisions to the deal, GSR Capital has finally agreed to invest US$5 million in Overstock’s blockchain subsidiary, tZERO. The amount represents a mere 2% of the original US$404 million funding proposed in August last year.
Cointelegraph reported that the Hong Kong-based private equity fund, GSR Capital, invested just US$5 million in tZERO equity, in the traditional form, instead of the previously agreed upon US$30 million in tZERO tokens.
The finalized transaction valued tZERO’s at US$1 billion, less than the US$1.5 billion expected under the initial agreement. The original deal with GSR, announced last summer, was expected to bring US$404 million to tZERO, but was postponed several times and downsized to US$100 million in March, and then to US$30 million in April.
Patrick Byrne, CEO of Overstock, announced the news during the company’s Q1 earnings call.
“We have accepted a $5 million investment from GSR at a $1 billion valuation and released them from all previous binding contracts,” Byrne stated.
According to a previous Cointelegraph report, GSR had brought in Singapore-based private equity firm Makara Capital in March, when the two firms intended to co-lead the US$100 million investment in tZERO.
Overstock claimed that Makara Capital is still conducting its due diligence of tZERO, and may decide to invest additional money into it.
“We are still working with Makara and feel optimistic (but not certain) that something can be consummated with them (and GSR may join in again at that point),” the company’s recent quarterly report said.
According to Byrne, tZERO failed to achieve its mid-April target raise of US$100 million due to the delayed deal.
So far tZERO’s major source of funding is still its parent company, Overstock, which reportedly had been considering selling its flagship e-commerce business this year, but has since set aside those plans.
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