Overstock's blockchain wing tZERO raises $5M via equity stake sale

tZERO, the blockchain subsidiary of online retailer Overstock.com, has raised $5 million via an equity stake sale.

Announcing the news on Tuesday, tZERO said Hong Kong-based private equity firm GoldenSand Capital (formerly known as GSR Capital) has bought the stake.

“tZERO is building the next generation capital markets platform, capable of tokenizing, trading and settling digital securities, and we are pleased to be joining them to further build this capability,” said Sonny Wu, chairman of GoldenSand Capital.

tZERO CEO Saum Noursalehi told The Block that the firm plans to utilize the fresh capital to expand its business into Asia. "We have three overarching priorities and the use of capital will support our ongoing operation and scaling of these priorities. Trade more assets, enhance liquidity on the tZERO ATS [alternative trading system] and continually improve investor's experience across our web and mobile platforms. The capital raised from GoldenSand Capital will aid in our execution across these three initiatives," Noursalehi added.

In August 2018, tZERO raised a hefty sum of $134 million via a security token offering (STO), though the firm originally had set a goal of raising $250 million. At the time, GSR Capital had agreed to invest as much as $400 million in both tZERO and Overstock.

“We plan to continue to collaborate with tZERO on strategic opportunities and are interested in partnering our wealth of industry connections across Asia with tZERO’s tokenization protocol technology,” Wu said in Tuesday’s announcement.

tZERO is also preparing to launch a  security token exchange called Boston Security Token Exchange (BSTX) - via a  joint venture with BOX Digital. The U.S. Securities and Exchange Commission (SEC), however, delayed the decision of approving or disapproving BSTX earlier this month due to some legal and policy issues.

Update: This story has been updated to include comments from tZERO CEO Saum Noursalehi