Hong Kong-based GSR Capital has officially closed on its investment in Overstock.com’s security token trading platform, tZERO, following months of delays as the deal underwent multiple revisions.
However, rather than buying US$30 million of tZERO tokens as previously agreed, the private equity fund invested just US$5 million in tZERO equity in the traditional form. As reported by CoinDesk, the finalized transaction valued the platform at US$1 billion, or half a billion less than in the initial agreement.
Overstock also said Makara Capital, a Singapore fund brought by GSR into the deal, is still conducting its due diligence of tZERO, and may still invest the money it pledged earlier.
Saum Noursalehi, CEO of tZERO, described the US$5 million investment as a “decent offer,” while Overstock stated that it consisted of US$1 million in U.S. dollars, US$1 million in Chinese Renminbi, and US$3 million in “certain securities.”
Originally, the deal with GSR was expected to bring US$404 million to tZERO, but was postponed several times and downsized to US$100 million in March 2019, and then to US$30 million the following month.
Given that tZERO did not obtain as much outside investment as it had initially hoped, it will instead rely on cash from Overstock for the time being, with earlier plans to sell the retail business postponed as well.
Still, tZERO appears to have found a major client with Dubai-based real estate giant Emaar, which has signed a letter of intent to issue tokens on tZERO.
Overstock is also planning to issue more tokenized shares in the long term, with the company possibly going full blockchain, according to Noursalehi.
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