Australian blockchain firm Everledger has reportedly entered insolvency proceedings after failing to raise new funds from an undisclosed investor.
Everledger, which uses blockchain to track the provenance of diamonds and other assets, failed to make its latest funding round happen, the AFR reported May 8
Everledger was subsequently quietly placed into voluntary administration as the company was unable to pay its debts. All Everledger employees received layoff notices on March 31, and Vincents Chartered Accountants was appointed as administrator on April 24. The first meeting of creditors was scheduled for May 8.
According to Everledger founder Leanne Kemp, the company's management was forced to make this decision to protect the interests of shareholders.
โThe 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 that Everledger has placed itself in an unexpected and difficult position,โ Kemp said.
One of the critically important decisions was to immediately fire the employees and keep the company in control of the managers while its affairs were finalized, the founder added.
Kemp went on to say that Everledger planned its latest investment around the last round of external funding required before profitability. "I would not suggest that Everledger is a 'cash burning' startup," he stated, adding:
โCertainly, our use of capital and operating footprint was fully aligned with the board's direction under a controlled growth plan. This is not a company that scaled too fast or took venture capital and burned it in 18 months."
Everledger did not immediately respond to Cointelegraph's request for comment.
The company's insolvency proceedings come despite Everledger being backed by major investors, including the Australian government and Chinese internet giant Tencent.
In 2019, Tencent led Everledger's Series A round with an investment of $20 million. According to AFR, Everledger has also raised $3.5 million from the UK government's Future Fund in 2021. Over the past eight years, Everledger has reportedly raised $51.7 million in outside investment.
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Everledger, founded in 2015, is one of the world's leading pioneers of blockchain-based platforms for tracking supply chains. Some companies, including the Danish logistics company Maersk and the American technology company IBM, have canceled its blockchain supply chain tracking productsciting a lack of "global industry collaboration."
Despite significant industry shutdowns, the concept of blockchain-based supply chain platforms continues to thrive in some parts of the world. Hong Kong-based Global Shipping Business Network continues to build blockchain-based supply chain products and is Bullish on Blockchain as a Crucial Logistics Tool long-term.
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