Tech startup Tezos raised $232 million in July through an “initial coin offering”;
Spending $50 million on venture investing, rest being put into stocks, bonds, and precious metals;
An unusual use of funds from a tech business, likely to fuel criticism of ICO sector.
LONDON — Early-stage tech companies are enjoying a funding boom in 2017, raising over $1 billion so far this year through so-called Initial Coin Offerings.
ICOs involve selling newly created digital currencies online. This new method of fundraising was pioneered by Ethereum in 2014 and has caught on with investors and startups this year after a big rally for Ethereum’s Ether currency.
One startup plumped for an ICO is Tezos. It raised $232 million selling “tezzies” back in July, the biggest ever ICO at the time.
Tezos is building a database-like platform for banks and other corporates to use to write “smart contracts” on. It uses blockchain technology, originally developed to underpin bitcoin, and competes with other startups like Ethereum and Bancor. Tezos has been in development since 2014 and is the brainchild of husband and wife team Arthur and Kathleen Breitman, former Morgan Stanley and Accenture workers respectively.
What has the company been doing with its huge pile of cash since raising it? Investing it, apparently.
Crowdfund Insider reports that Tezos is committing $50 million to venture capital investing, backing companies that are building on its platform. As for the rest of its cash, it’s investing it in “things like stocks, bonds and precious metals,” according to the report.
This is all pretty unusual.
Firstly, tech companies don’t often double up as venture capital offices — it’s not their area of expertise. Those that do have venture capital arms — Salesforce or Google, for example — tend to be Goliaths who are making enough spare cash to justify it, not …read more
Source:: Business Insider