ConsenSys has dismissed rumors that it is seeking new capital, insisting it has plenty of cash and is not engaged in any formal fundraising effort.
ConsenSys, a leading Ethereum software company, was rumored to be fundraising after holding talks with investors over the summer about a potential capital injection.
The talks came after a period in which the shares of numerous highly valued, privately held crypto startups — ConsenSys among them — have traded at significant discounts on secondary market platforms.
Two of the people familiar with ConsenSys’s recent funding discussions said that any resulting raise would be a “down round,” valuing the firm at less than $7 billion.
ConsenSys last raised capital in early 2022 in a $450 million Series D round led by ParaFi Capital that valued the startup at $7 billion. Deep-pocketed backers like SoftBank Vision Fund 2, Temasek, and Microsoft also participated.
ConsenSys’ Position on the Rumors
ConsenSys has brushed off these talks, stating that while the startup occasionally considers “inbound investor interest,” it still holds plenty of cash and is not actively engaged in a formal process.
A ConsenSys spokesperson also said that many people in the crypto industry perceived the company as the winner after the debacles of 2022, when several crypto projects collapsed amid regulatory crackdowns and market volatility.
“Consensys has been widely perceived as the winner after the debacles of 2022,”. “Consequently, the company has experienced a significant influx of inbound investor interest, fueled in part by inaccurate reporting on the secondary market activity in our stock earlier this year,”
He added that the company doesn’t need money and is “not actively engaged in a formal process.”
When questioned about these omissions, the spokesperson clarified that secondary markets account for “a tiny fraction” of transactions in ConsenSys stock.
“Consensys is highly capitalized and has demonstrated strong performance across all areas year to date,” the company spokesperson said. “Therefore, our existing shareholders have no intention of accepting any dilution on terms inferior to our Series D. Any claims suggesting engagement with the company regarding discussions of a down round would be providing you with inaccurate information and may be an attempt to negotiate via the press on their part.”
The spokesperson also said that ConsenSys has been using its capital to hoover up its shares from secondary market platforms, where they have been trading at significant discounts.
“The company has ample cash, believes nearly all of the proposed secondary transactions we have been given notice of this year significantly undervalued the company and have been exercising our right of first refusal on them, accordingly,”
ConsenSys Spokesman
ConsenSys’ stance indicates that the company is confident in its financial position and growth prospects, despite the challenges facing the crypto industry.
By buying back its own shares, ConsenSys is signaling that it believes its stock is undervalued and expects its valuation to rise in the future.
ConsenSys’ position also reflects its commitment to building software for the Ethereum ecosystem and supporting its innovation and adoption.
By converting its proceeds from the round to ETH, ConsenSys demonstrates its support for Ethereum’s upcoming transition to Proof-of-Stake, which will make the network more secure and scalable.
