ConsenSys Reportedly Planning to Lay Off Up to 60% of Its Staff

Siamak Masnavi

On Thursday (20 December 2018), technology news outlet The Verge reported that ConsenSys, an Ethereum-focused blockchain incubator ("venture studio") and solution provider, was planning to spin off most off of its 50+ startups ("spokes"), and that this could mean up to 60% of the company's staff could be laid off.

ConsenSys, which was founded in 2015 by Ethereum co-founder Joseph Lubin, currently has "over 1100 employees distributed globally in every continent except Antarctica." It primarily sees itself as "a venture production studio focused on building and scaling tools, disruptive startups, and enterprise software products powered by decentralized technology, specifically Ethereum," and describes its mission as using "these solutions to power the emerging economic, social, and political operating systems of the planet."

ConsenSys refers to incubator (or venture studio) part of its business as ConsenSys Labs, and says that this "incubates the best teams of Web3 across the globe, providing them capital, mentorship, and access to ConsenSys’s network of top-tier projects and talent." A few examples of the over 50 projects currently being incubated by ConnsenSys Labs are AirSwap, Civil, Gnosis, Infura, and MetaMask.

The Verge reports says:

"A term sheet reviewed by The Verge and given to at least two incubated startups within the company showed that ConsenSys is beginning to spin out its large portfolio of blockchain projects, often without the financial support they’d need to find outside funding and succeed. When reached for comment, a representative for ConsenSys did not deny that layoffs were impending, and only said that the company is speaking with every spoke and project to 'determine a path forward, whether that will be internally as a part of ConsenSys 2.0, or as an external entity.' The vast majority of people working at spokes are ConsenSys employees, and many spokes don’t yet have a revenue-viable product."

On December 6th, ConsenSys confirmed to Coindesk that was laying off 13% of its staff:

“Excited as we are about ConsenSys 2.0, our first step in this direction has been a difficult one: we are streamlining several parts of the business including ConsenSys Solutions, spokes, and hub services, leading to a 13% reduction of mesh members... Projects will continue to be evaluated with rigor, as the cornerstone of ConsenSys 2.0 is technical excellence, coupled with innovative blockchain business models."

In an interview with Coindesk on December 5th, Lubin had referred to the restructuring of ConsenSys as "a refocusing of priorities on more rigor, more structure, more sustainability, more accountability." He also said that his firm has been spending more time with external investors in order to “open up” fundraising opportunities for its startup ventures:

“Certainly one goal is to enable ConsenSys and its projects to not be dependent on the price of these value tokens, that essentially they are all thriving businesses in their own right."

Lubin also told Coindesk that ConsenSys wanted to change its focus for its ventures from cool to viable/profitable:

“We’ve definitely been more focused on doing cool things in the past, and now we’re just focused on being a set of viable and successful businesses in a real business ecosystem... Blockchain is getting very, very real. It’s about the maturation of the company.”

One source told The Verge that ConsenSys is "using the 13 percent announcement I would imagine to give comfort to potential investors about the small-scale downsizing."

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PayPal is Cautiously Optimistic About Partnership with Libra Association

  • PayPal cautious about future with Facebook's digital currency libra. 
  • Payment platform was one of the first companies to join and support the Libra Association.

Payment platform PayPal is cautiously optimistic about its relationship with Facebook’s digital currency libra, despite being the highest-profile company to join the Libra Association. 

PayPal Backs Libra Association

In June, shortly after the official unveiling of Facebook’s libra, PayPal announced an intention to join and support the Libra Association, a collection of tech and finance companies promoting the product. 

At the time, PayPal billed the digital currency as a revolutionary product for people around the world, 

We believe in democratizing participation in the digital economy for people from all walks of life, and businesses of all sizes.

However, PayPal appears cautious about its future with Facebook’s digital currency. PayPal investor relations vice president Gabrielle Rabinovitch reiterated Sept. 12 that the company is a non-binding agreement with libra, 

It's a non-binding commitment. And obviously, I think there's a lot of work to happen before we get to that point where it becomes something more than just a very exciting idea.

She added, 

The goals and ambitions of Libra are very consistent with PayPal's overall ambitions in terms of serving the underserved; democratizing access to capital. So we very much believe in the potential of Libra.

While PayPal appears optimistic about the future of libra, the digital currency has endured months of regulatory and political scrutiny concerning its release. 

Earlier in the week, senior U.S. Treasury official Sigal Mandelker told an audience in Geneva that libra would be held to the highest standard of regulatory compliance in order to combat money laundering and terrorist funding.

 

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