Is the struggling startup worth $1 Billion?
The Crypto winter keeps hitting the bottom lines of ConsenSys. ConsenSys is a software technology company founded by Joseph Lubin based in Brooklyn, New York. It’s building the infrastructure, applications, and practices that enable a decentralized world and sees itself as an for Enterprise type facilitator.
Joseph Lubin is obviously biased, and heavily invested in . He also thinks. Given Etheruem 2.0 is going to be slow to roll out and public blockchains don’t yet scale, it’s hard to see this happening as of 2019.
However not surprisingly, ConsenSys as an entity is also running out of money. ConsenSys is seeking a funding boost.
ConsenSys is struggling financially and is now trying to raise $200 million from outside investors to stay afloat. It values itself at $1 Billion, but it’s hard to see how that works.
Sure Ether is implicated in how Enterprise is implicated in . How? In a lot of ways:
Supply Chain and Retail
Consumer Goods and Beverages
Banking and Financial Services
Energy
Healthcare and Insurance
Fintech
Software and Information Technology
Telecommunications
Electronics Manufacturing
While you’d think this bodes well for ConsenSys, that’s not necessarily the case. Just as Facebook or JP Morgan are showing, it’s easier to build an internal stablecoin than it is to partner with , XRP or anybody else for that matter.
The fundraising drive comes just four months after the Brooklyn-based startup laid off 13% of its workforce. The crypto winter has been tough on startups and even established players all along. For instance, Mike Novogratz’s crypto desk has lost well over $150 million since tanked.
Public Blockchains like , NEO and others will realistically struggle to keep up with the next-gen public blockchains (too many to name). Meanwhile and are claiming to be competitions to in the area of Dapp innovation.
The in mid April about ConenSys seeking more funding. So while sources say the crypto company wants its valuation to top $1 billion, but prospective investors believe that’s unrealistic given its current financial woes.
We have to deeply reconsider just how is and what the actual business model of ConsenSys is. on a 2016 podcast that ConsenSys was “internally funded by private investment” and has previously said that he has sold some of his ETH holdings to fund the company. That’s highly problematic when you are throwing the phrase “decentralization” around.
ConsenSys, which employed some 900 people as of a month ago, is one of the largest U.S.-based crypto companies and has served as the most prominent champion of the network. ConsenSys brought in just $21 million in revenue in 2018. That’s not a very sustainable business model, at all.
Yet ConsenSys just keeps on ticking. ConsenSys Ventures, the investment arm of development studio ConsenSys, has selected 10 startups for the second cohort of its accelerator program Tachyon.
The selected startups were: (April, 2019)
- Blockchain-enabled DNA data bank Genomes
- Energy market-focused blockchain startup Blok-Z
- Protocol for self-sovereign identity Glimpse
- Blockchain-backed data authenticity software maker Sensor.link
- Litigation finance investment platform Lawcoin
- Cryptocurrency security storage solutions provider Cypherock
- Manufacturer of customized printed cryptocurrency cards Ether.cards
- Smart contract and transaction security firm Sooho
- Blockchain-based micro-insurance firm Ibisa
- Open source protocol maker for including digital assets into links LinkDrop.
You cut 13% of your staff, you better believe it that you need more funding. The bloated crypto ecosystem needed an event like the crypto winter so the quality could rise to the surface. Is that , Dfinity, Harmony, Nervos or another? It’s probably not , , NEO, Tezos, Waves, etc…
ConsenSys is a high-risk bet that can remain on top. If is irreplaceable as a digital asset, ’s ecosystem no matter how impressive will eventually fall, it’s just a question of when, not if.
ConsenSys believes it can become a valuable company, provided it can get through the next year. That’s not the kind of strategy as an investor I’d want to hear.
Published at Thu, 25 Apr 2019 19:07:35 +0000
