US retail giant Overstock has invested in blockchain technology specialist Peernova as part of its second tranche of Series A financing.
Formed through a merger between cloud mining contract provider CloudHashing and ASIC hardware designer HighBitcoin in early 2014, Peernova raised $8.6m in funding last December as it sought to accelerate its shift away from mining.
In statements, general manager of Overstock’s Cryptocurrencies Group Judd Bagley framed Overstock‘s first investment in a bitcoin industry firm as a vote of confidence in the decentralized ledger-based technologies Peernova is currently building.
Bagley told CoinDesk:
“PeerNova is precisely the kind of company we’re eager to back up. Their team is brilliant and agile and the products they have in the works are going to change the way business is done forever. They get the transformative nature of the blockchain.”
Overstock invested $5m in the firm, a decision approved by its board of directors and that will be announced it in its next quarterly report to stockholders.
Peernova indicated that the funding has increased its total to-date financing to $19m in equity and debt financing.
Company representatives suggested the first entries in its new line of projects, focused on data security and finance, are to be released soon.
Venture interest
Bagley went on to suggest that Overstock is currently seeking to expand its venture finance investments in blockchain and decentralised ledger-based technology providers.
“We’re completely bought into the idea that decentralized ledgers will play a significant role in business going forward,” Bagley said, adding that the company believes the technology could disrupt entire business verticals.
Bagley cited Medici, the decentralised stock exchange announced by Overstock in 2014, as an example of a project with such ambitious goals.
“There’s a huge opportunity to disrupt entire segments of the business ecosystem, particularly in cases where intermediaries introduce substantial frictional and transaction costs,” he continued.
Medici is currently being developed as part of a special division at Overstock, though the project’s original developers, Counterparty’s Robby Dermody and Evan Wagner, have since departed to start financial market platform Symbiont.
Brand struggles
While Peernova has attracted new investment, evidence suggests its older line of products continues to suffer from a poor reputation in the general market.
Though the HighBitcoin brand was discontinued, CloudHashing continues to attract criticisms from the wider community. At press time, its website is inactive.
A Twitter search for CloudHashing’s handle reveals a small but vocal group of former investors who are seeking to get in touch with the company.
Further, Reddit forums details customers who report both losing money on mining contracts, and being asked to pay money to end services.
CoinDesk has contacted Peernova for more information but did not receive an immediate response.
Investment image via Shutterstock