Distributed ledger startup R3 is reportedly running low on cash – and judging by the social media response, the crypto-community isn't showing much sympathy.
Fortune reported Thursday that R3 is facing a cash crunch, coming just over a year after the company announced a $107 million funding round to "bring blockchain services to the financial sector" (though per the publication, $98.2 million of that amount constituted "new money.")
Charley Cooper, a managing director for R3, "did not provide any specific figures but told Fortune that the company exceeded its revenue targets last year and will provide an update at the end of this calendar year," according to Fortune.
R3 first launched in 2014 with the stated goal of applying the technology underpinnings of blockchain to the finance sector, culminating in the launch of their distributed ledger technology (DLT) platform Corda. Its consortium attracted a number of big-name supporters including Wall Street banks like JPMorgan and Goldman Sachs.
But R3 later ran into headwinds, losing JPMorgan and Goldman, among others, as consortium members in 2017, as reported by CoinDesk.
Fortune, citing two former employees at R3, reported that the company could be out of money by early next year even with the recently raised $107 million funds. One of them added that the number was also likely "overstated" as it "included consulting fees from prior years that R3 reclassified as equity under terms of its partner agreements."
Yet in a tweet published Friday, R3 indicated that its finances aren't a concern.
We're flattered by all the attention, but really, we're fine ☺️ pic.twitter.com/4u9LuInIab
— R3 (@inside_r3) June 8, 2018
What the community is sayingFor some observers, the reported problems represent a kind of comeuppance in light of comments from R3's executives about bitcoin.
These are the guys who said "The Bitcoin experiment has failed"
These are the guys who said "No Blockchain, because we don't need one"
Again and again, the legacy banking and corporate world will fail to understand Bitcoin's fundamental value proposition.https://t.co/F5XVNcewdA
— Beautyon (@Beautyon_) June 7, 2018
For people new to the space wondering why anyone cares: many of R3's execs aggressively derided bitcoin for *years*, and really spearheaded the backwards "blockchain not bitcoin" nonsense. https://t.co/sojfrTJykA
— Dan McArdle (@robustus) June 7, 2018
One observer honed in on R3's alleged big-spending ways.
I couldn't prove, but always felt that for R3 executives their lifestyle/self interest > productivity, while for Ripple it's the exact opposite. pic.twitter.com/zqFbqoQikD
— TplusZero (@TplusZero) June 8, 2018
Another (perhaps only somewhat jokingly) suggested that R3's investors would have been better off had they invested the funds in bitcoin instead.
If @inside_r3 investors bought bitcoin instead, they would now own 101,462 BTC worth $781 million. Ouch! pic.twitter.com/sVWOdFNw2c
— girevik (@girevikcap) June 7, 2018
And to this observer, the reported woes highlight the hard lessons for investors.
R3 reportedly running out of money. Former employees claim internal revenue targets were "short 10x", "laughably off".
Investors learning the hard way to be skeptical of hand-wavy blockchain hype.https://t.co/Tn6PithFeZ
— Stephen ⚡️ (@sthenc) June 7, 2018
Image via Shutterstock
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