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The Australian blockchain firm Everledger has reportedly initiated insolvency proceedings after being unable to secure new funding from an undisclosed investor.
Everledger, which utilizes blockchain technology to trace the origins of diamonds and various goods, was unable to complete its latest funding round, as reported by the AFR on May 8.
As a result, Everledger was discreetly placed into voluntary administration due to its inability to meet its financial obligations. All employees received layoff notices on March 31, and Vincents Chartered Accountants were appointed as administrators on April 24. The initial meeting of creditors was set for May 8.
According to Everledger’s founder Leanne Kemp, the management team was compelled to make this decision to safeguard the interests of shareholders.
“The second tranche of funding expected by Everledger did not come through, and we understand that there are external factors and pressures affecting this investor, which has placed Everledger in a challenging and unforeseen situation,” Kemp stated.
One of the crucial decisions made was the immediate redundancy of employees and to keep the firm under the control of administrators while its affairs were being resolved, the founder noted.
Everledger founder Leanne Kemp. Source: The AFR
Kemp further mentioned that Everledger had structured its latest investment around the final external funding round needed before achieving profitability. “I would not characterize Everledger as a ‘cash burning’ startup,” she remarked, adding:
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“Certainly, our capital utilization and operational strategy were fully aligned with the board’s direction under a controlled growth plan. This is not a company that expanded too rapidly or accepted venture capital only to exhaust it in 18 months.”
Everledger did not promptly respond to Cointelegraph’s inquiry for comment.
The company’s insolvency proceedings occur despite Everledger being supported by significant investors, including the Australian government and the Chinese tech giant Tencent.
In 2019, Tencent led Everledger’s Series A funding round with a $20 million investment. According to the AFR, Everledger also obtained $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 funding.
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Established in 2015, Everledger is among the leading companies innovating blockchain-based platforms for supply chain tracking. Some firms, such as the Danish logistics company Maersk and the United States technology firm IBM, have discontinued their blockchain supply chain tracking initiatives, citing a lack of “global industry collaboration.”
Despite significant industry shutdowns, the idea of blockchain-based supply chain platforms continues to flourish in certain regions. The Hong Kong-based Global Shipping Business Network is actively developing blockchain-based supply chain solutions and remains optimistic about blockchain as an essential logistics tool in the long run.
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