Fortune report casts doubt on R3 finances
Distributed ledger technology consortium R3 has secured investment from Japanese IT service management firm TIS, in a deal which will help accelerate “the global development and adoption of blockchain applications”.
However, doubts about the consortium’s longer-term prospects continue, after Fortune magazine reported claims by two former R3 employees that the company is floundering. They say that while R3 has announced millions raised in funding, it could be insolvent by next year.
R3 said that its Corda flagship blockchain platform will likely be positioned in Japan by TIS, which has a “strong group presence in the region” and a “sound customer base in financial, banking, payment and manufacturing industries.”
“This investment is testament to the potential that major IT companies such as TIS see in Corda,” said R3 CEO David Rutter. “We are experiencing growing support for Corda not just from the financial services community, but from a diverse mix of technology firms serving an expanding range of industries.
“These firms are building innovative apps on the platform that enable them to unlock new value for themselves and transform business processes for the sectors they serve.”
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Meanwhile, the Fortune report suggests that R3 has encountered problems since announcing a $107m funding round back in May 2017. At the time, it also suggested the round was the first tranche of a larger plan to raise a further $200m as it built out the consortium.
That plan “appears to have fallen far short” says the magazine. Although R3 last month raised a further $15m from financial settlement provider CLS and two other companies, the ex-employees allege that a much bigger round had been aimed for
In an email statement, R3 said the widely-reported target figure of $200m was based on a one-time plan to sell a stake in a research subsidiary, but that the company had since decided not to proceed with the sale.
R3’s managing director Charlie Cooper disputed the claims and told Fortune that the company had exceeded its revenue goals for 2017 and would update all of their financials at the end of this year.