Blockchain-based financial services provider R3 has been rumored to be facing insolvency issues despite claims of raising millions, and could flop in 2019, Fortune stated.
R3 began as an invitation-only consortium in 2014, providing blockchain-based services to prominent banks, and had initial members like leading financial services firm J.P Morgan Chase & Co., and global investment banking and investment firm Goldman Sachs. The organization quickly grew, thereby adding more partners to their team. However, things went rough and Goldman Sachs left the organization.
In 2017, R3 claimed to have raised $107 mln in funds and said that it was only the beginning — they were poised at raising another $107 mln.
Currently, the organization is encountering problems despite its claims, which began when an employee said that the amount includes fees taken in before the funding round. Fortune magazine confirmed the information with the company; R3 conceded, admitting that it was only able to raise $98.2 million at the time. The anonymous whistleblower asked to remain unknown so as to continue having working relationships went further in saying that the company’s revenue estimates are “laughably off,” perhaps even “10x short”.
R3’s managing director Charlie Cooper flatly denied the allegations, claiming that the company was even able to exceed its goals last year, and vowing to give an update at this year’s end regarding their financials.