Crypto custody infrastructure provider Qredo, which raised a hefty $80 million funding round last year from Coinbase Ventures and others, is in a tight financial situation.
The company has around six months of runway left and just cut 50% of staff — once again, four sources with direct knowledge of the matter told The Block. In September, The Block reported that Qredo had already let go of approximately 50 people.
Additional job cuts continued into late last month, and the current headcount at the firm stands at about 50, down from over 200 earlier this year, the sources said.
Qredo is actively seeking fresh funding and exploring strategic mergers and acquisition opportunities to stay afloat, two of the four sources said. Notably, Dan Tapiero's 10T Holdings, Qredo's Series A lead investor, is helping in these efforts, per the sources. 10T Holdings did not immediately respond to a request for comment.
Qredo is struggling because its business has declined. "Qredo saw a monthly average of $2.5 billion of transactional activity in H2 2022 and through Q1 2023 — this activity has fallen, along with overall market activity, throughout the course of this year," a Qredo spokesperson told The Block. "With this prolonged cryptowinter, Qredo has chosen to right-size its business and focus on the core areas of growth in web3 wallets and custody solutions."
Qredo was valued at $460 million last year
Qredo was valued at $460 million in February 2022, when it raised $80 million in Series A funding. At the time, the company had intentions of using the funds to drive growth through acquisitions, product development and geographic expansion. It remains unclear how all of that capital was utilized.
In September also, a Qredo spokesperson attributed job cuts to a "prolonged cryptowinter," explaining that the company was "right-sizing to focus on its core protocol and its web3 custody business."
Qredo's core offerings include its Layer 2 protocol, known as the Qredo Network, and a custody technique called distributed multi-party computation. "With Qredo, there is no third-party custodian. All funds and transactions are recorded on-chain on the Qredo Network and protected by our unique [dMPC technology]," the company's website states.
Qredo was founded in 2018 and has raised around $94 million in total venture capital funding. In July 2021, the company also raised $35 million in a QRDO token sale. Qredo's venture capital investors include Coinbase Ventures, Avalanche, Kingsway Capital and GoldenTree Asset Management.
QRDO token down nearly 100% from its peak
The QRDO token has experienced a massive drop, falling nearly 100% from its peak price of $9.81 in November 2021 to current levels of around $0.03915180, as per CoinGecko data. The fully diluted valuation of the token stands at around $64 million.
Qredo's second round of layoffs comes as more crypto firms have been cutting jobs. In recent weeks, crypto hardware wallet manufacturer Ledger, blockchain analytics firm Chainalysis and blockchain developer Chia Network have all slashed their workforce.
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