GSR Capital, a Chinese private equity firm, will establish what would become the largest single investment ever made in a Blockchain platform. The investment of GSR Capital will allow it to acquire around 3.1 million shares of Overstock, a company established in the United States, which represent approximately 10% of the total shares of that firm.
As stated in a letter of intent confirmed to Forbes, GSR Capital will invest as much as US $ 270 million to acquire 18% of the tZero platform in the initial stage of the investment. Subsequently, the company will have to pay another US $ 104.55 million for the 10% share already mentioned in Overstock.
The tZero platform is a subsidiary of Overstock that allows the negotiation of public and private securities issued in a chain of blocks. At tZero's ICO, GSR Capital still plans to inject another US $ 30 million as additional investment, representing a total amount raised of US $ 134 million.
Cumulatively, the total amount involved in this transaction could reach US $ 404 million, raising the valuation of tZero to US $ 1.5 billion as of December 15, 2018, all other things being equal.
This fragmented agreement involves a couple of independent letters of intent signed by all parties involved, in what the president and CEO of Overstock.com, Patrick Byrne, describes as a parabolic "wedding cake".
According to Byrne, the independent letters of intent were signed by GSR and tZero, and GSR and Overstock. It is also expected that three more investments from Asia and the Middle East will be announced.
Although it has its headquarters in the United States, Byrne points out the difficulty of raising capital in the country as a key reason why foreign investments seem to lead the capitalization processes of the company. This is the reality, even with a fully registered company with SEC license as Overstock.
"To be honest, US capitals are suspicious of this entire blockchain issue, and I am sorry to say that North America is not the world's leading country on this issue," says Byrne.
Byrne continues to publicize tZero's plans to spend the funds raised in the deployment of multiple tokenized stock exchanges worldwide, in parallel to its operation under US license.
This exercise registers another milestone for Blockchain in its adoption by the main establishments. It is the first blockchain experience for GSR Capital in terms of public investment, being previously known for its financial incursions in the areas of electric vehicles and clean energy.