China's GSR to invest $405m in US-based Overstock

According to a statement, GSR will purchase up to 3.1 million shares in Overstock for $33.73 each, a 5% discount to the August 1 closing price of $35.50. GSR will also invest up to $270 million in tZero for an 18% stake, while paying Overstock $30 million for tZero security tokens acquired by the parent company in tZero's recent initial coin offering (ICO).

Salt Lake City-based Overstock primarily sells home goods including decor, furnishings, rugs, and bedding. The company's business model initially focused on selling off closeout stock from liquidated companies at below wholesale price, but it now sells new merchandise as well.

Overstock founder Patrick Byrne launched tZero in 2015 as a wholly-owned subsidiary of Overstock. The company focuses on the development and commercialization of financial technology through the integration of blockchain technology with capital markets. It plans to launch tokenized securities exchanges on a global basis to enable greater transparency in securities trading.

"GSR Capital has the prescience to understand the disruptive power of blockchain capital markets," said Byrne. "They are aligned with our vision for the future of capital markets built upon the speed, trust, and security of the blockchain. And most importantly, they think big, and want to help us scale this vision globally as quickly as possible."

GSR has offices in Beijing, Hong Kong, and Palo Alto, and is affiliated to early-stage venture firm GSR Ventures, renminbi investment platform GSR United Capital, and overseas acquisition platform Go Scale Capital. The firm raised $1 billion in 2016 for a vehicle that invests in LED companies and launched a cross-border M&A fund with Go Scale in 2015.

Last year GSR agreed to acquire the electric battery business of Nissan Motor in a deal reportedly worth $1 billion. However, Nissan terminated the sale earlier this year, reporting that GSR didn't have sufficient funds to complete the transaction.

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• Topics
• Greater China
• Technology
• Consumer
• Financials
• Growth
• China
• TMT
• GSR Ventures
• Financial Services