tZERO Slashes Jobs, Salaries as It Gears Up for Another Funding Round
www.coindesk.com 2020-08-01 00:50
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Security token platform tZERO, which has tried to raise hundreds of millions of dollars in investment, has cut staff and salaries as it hunts for more capital.
- In an otherwise upbeat company update Wednesday, CEO Saum Noursalehi said tZERO had "significantly reduced" its cash burn rate by 45% year-on-year.
- Savings came from cuts to legal costs and staff headcount; remaining senior staff took salary cuts in return for company equity.
- Board members are now compensated only in equity; Noursalehi said he reduced his own salary by 60%.
- "This underscores just how much I, and others, believe in our mission," his note reads; development work for the tZERO platform was mostly complete, he added.
- tZERO is now preparing for another capital raise, Noursalehi confirmed; a funding target wasn't disclosed.
- A majority-owned subsidiary of U.S. online retailer Overstock, tZERO raised $134 million in an initial coin offering in 2018 – short of its $250 million target.
- Chinese fund GoldenSands Capital pledged to lead a $374.55 million round for tZERO in 2018 – this was knocked down to a $5 million investment in April 2020.
- In the note Wednesday, Noursalehi claimed tZERO dominated the security token space, accounting for 95% of token trading volume and 80% of the dollar value.
- But the tZERO platform only has three broker-dealers and two security tokens – a third token, for real estate in Aspen, Colorado, will be listed soon.
- In an SEC filing for Q1 2020, tZERO said it made a gross profit just shy of $76,000 – the company reported a $10 million net loss in Q2 2019.
See also: US Regulator Clears Security Token Trading System to Launch