Cryex, a company that intended to build blockchains for banks, is being sold off for bottom dollar. The business started to face difficult economic times, according to a news piece published today in Swedish media. The Swedish-based bitcoin exchange Safello are buying in exchange for shares, no cash involved, according to reports. Cryex originally burst into the spotlight in 2015 when investors poured 10+ millions of dollars worth of seed funding into the company.
The Breakit article elaborated: “Now the company is about to be sold. A sale which is reported to at an extremely low price. Negotiations between the buyer, Safello, and Cryex began during the summer.”
What was Cryex?
The Cryex founders established the company to build blockchains for banks and similar offers. They were charged with finding ways to facilitate bank transfers with distributed ledger technology, much in the way bitcoin functions. However, their business plan seems to have fallen flat. The Breakit news article elaborated:
The plan was to build a technique for linking blockchain to banking transactions, and putting banks in direct contact with the global system. Since then things have not gone as planned. Cryex has completely changed its focus – and was facing a difficult economic situation a year ago.
Lotta Eek, CEO of Cryex, does not want to comment on the impending sale. According to the Breakit article, Eek has referred all questions and concerns to Safello’s CEO, Frank Schuil.
Merger of Company’s and Cryex Undervaluation
Cyrex employees will now have joint ownership over the company after the deal is complete. Safello recently called its shareholders to a meeting to determine if the acquisition of Cyrex was the right move for the company.
The overall valuation of the Blockchain-building firm was undeniably low. The company is only worth $2.5 million for the purposes of the sale. However, investors pumped roughly $12 million USD worth of SEK into the company at the beginning.
“The valuation is astonishingly low, according to the basis of which Breakit has taken part. It is set at $ 2.5 million, equivalent to just over SEK 20 million. By comparison, Cryex investors have pumped a total of around SEK 100 million into the company.”
Nonetheless, both companies have agreed to follow through with the deal.
What do you think about Safello buying out Cryex? Was building blockchains for banks a good idea anyway? Let us know in the comments below!
Images courtesy of Shutterstock and Cryex
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