Everledger's founder Leanne Kemp claims the company was not a "cash burning" startup.
Everledger, an Australian Brisbane-based blockchain firm, is reportedly facing insolvency after an undisclosed investor's funding fell through.
According to the news portal the Australian Financial Review (AFR) on May 8th, the company, known for using blockchain to track the origin of diamonds and other goods, couldn't secure its latest funding round.
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Therefore, it is believed that Everledger entered voluntary administration as it was unable to pay its debts.
The AFR noted that all employees received layoff notices on March 31st, and Vincents Chartered Accountants were appointed as administrators on April 24th. On top of that, the first creditors' meeting regarding insolvency proceedings took place on May 8th.
Everledger's founder, Leanne Kemp, explained that the company's management had to make the decision to protect shareholder interests.
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.
Leanne Kemp added that the immediate redundancy of employees and the transfer of control to administrators were critical decisions made while finalizing its affairs.
Kemp emphasized that Everledger's latest investment was planned around the last external funding round needed before reaching profitability. She denied that the company was a "cash burning" startup, asserting that their capital use and operational footprint aligned with the board's directions for controlled growth.
Certainly, our use of capital and the 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.
Despite being backed by major investors like the Australian government and Chinese internet giant Tencent, Everledger now faces insolvency proceedings.
While Everledger is placed into voluntary administration, other firms, like Danish logistics company Maersk and US tech firm IBM, have discontinued their blockchain supply chain tracking products due to insufficient "global industry collaboration."
Everledger's insolvency highlights the challenges blockchain firms can face, even with substantial backing from influential investors.
