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News making rounds suggest that ConsenSys, one of the world-leading blockchain software technology companies and the a prominent member of the Ethereum world, may be struggling to get back on its feet after a difficult ride in 2018.
This indication was fueled by recent moves of the company. First, the company laid off up to 13% of their workforce in December. This is a significant drop from the 1,200 employees that worked in the firm. In addition, the company which has been headed and funded by Joseph Lubin, co-founder of the Ethereum Blockchain, is reportedly seeking about 200 million USD in funding from interested investors.
While this is not an unusual move for blockchain-based companies, it is, however, leading to different suspicious theories of thoughts. Reports have it that investors are, in fact, scared of putting their hard-earned cash in ConsenSys as they fear that Lubin has been the sole head of the firm for so long and they worry how much he is ready to cede some power and control to investors. Also, there is the notion that investors are scared the firm is struggling due to how much crypto prices have fallen in the past year.
If everything goes as planned, the blockchain technology giant plans to use the funds to fuel its project that is focused on consulting with blockchain-oriented firms on how to use blockchain technology.
The New York-based firm which had a total revenue of 21 million USD in 2018 has projected a total revenue of about $50 million USD this year, $40 million of which from its services business which relies primarily on contracts from enterprise and government clients, while the remaining share of the sum is expected to come from its software business.
As the plan of winning investors over seems to be a rougher drive than they planned for, the firm has begun pitching its ideas to clients in Hong Kong and South Korea. This move is viewed as a good one as ConsenSys has a better chance of winning investors from Hong Kong and South Korea than in the United States, because venture capitalists in Hong Kong and South Korea are in a desperate search for ways to diversify their portfolios after the stringent capital control made by China.
Subsidiaries of the blockchain giant firm are not left out of this hit. Lubin announced in December that the firm will impose stricter performance standards on its portfolio companies as part of the sweeping and re-organization move in the firm. A related news stated that some of these companies have since been struggling to raise outside capital and at least one of them has shut down since the announcement.