The Australian blockchain company Everledger has reportedly entered insolvency proceedings after failing to raise new funding from an undisclosed investor.
Everledger, which uses blockchain to track the provenance of diamonds and other goods, failed to make its latest funding round happen, the AFR reported on May 8.
Subsequently, Everledger was quietly placed into voluntary administration as the firm could not pay its debts. All Everledger employees were given layoff notices on March 31, with Vincents Chartered Accountants being appointed as administrators on April 24. The first meeting of creditors was scheduled for May 8.
According to Everledger founder Leanne Kemp, the company’s management was forced to take this decision to protect the interests of shareholders.
“The second tranche of funding due to Everledger did not materialize, and subsequently, we understand that there are external reasons and pressures on this investor, which has meant Everledger was placed in a difficult and unexpected position,” Kemp said.
One of the critically important decisions was an immediate redundancy of employees and to hold the firm in control of administrators while its affairs were finalized, the founder added.
Everledger founder Leanne Kemp. Source: The AFR
Kemp went on to say that Everledger indeed planned its latest investment around as the last external funding round required before profitability. “I would not suggest Everledger was a ‘cash burning’ startup,” she noted, adding:
“Certainly, our use of capital and operational footprint was in total alignment with the board’s direction under a controlled growth plan. This is not a company that scaled too fast or took on venture capital and burnt it in 18 months.”
Everledger did not immediately respond to Cointelegraph’s request for comment.
The company’s insolvency proceedings come despite Everledger being backed by major investors including the federal government and the Chinese internet giant Tencent.
In 2019, Tencent led Everledger’s Series A round with a $20 million investment. According to the AFR, Everledger also secured $3.5 million from the United Kingdom Government’s Future Fund in 2021. Over the past eight years, Everledger has reportedly raised $51.7 million in external investment.
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Founded in 2015, Everledger is one of the world’s major companies that pioneered blockchain-based platforms for tracking supply chains. Some of such companies, including the Danish logistics firm Maersk and the United States technology company IBM, have terminated their blockchain supply chain tracking products, citing a lack of “global industry collaboration.”
Despite major industry closures, the concept of blockchain-based supply chain platforms is still thriving in some parts of the world. As such, Hong Kong-based Global Shipping Business Network continues building blockchain-based supply chain products and is bullish on blockchain as a crucial logistics tool in the long term.
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