The digital payment start-up Monetas, run by under-fire Tezos Foundation president Johann Gevers, has come to a standstill having failed to find new investors. The Zug-based firm has been forced to let go all of its employees, retaining only a small core group as contractors.
“It’s very disappointing that just when we were finally ready to capitalise on exciting commercial opportunities, we lacked the funds to execute,” Gevers said in a note to investors sent on October 23.
The news comes at a time when the South African-born Gevers is already under fire for his stewardship of the Tezos Foundation in Zug. Gevers has been accused by the Tezos founders, Arthur and Kathleen Breitman, of attempting to misrepresent the size of a bonusexternal link – allegations that he vehemently denies.
Earlier this month, Gevers told swissinfo.ch that he had invested a sizeable amount in Tezos.
“In addition to founding the Tezos Foundation and paying the legally required founding contribution of CHF50,000 [$50,075] from my own pocket, I also contributed a very large further amount to the Foundation — several times larger than the total amount put in by the Breitmans from 2014 to the present,” he said in an emailed note. “This makes me one of the largest contributors in the Tezos ICO.”
But Gevers denies that there is a conflict of interest between the struggling Monetas and his involvement in Tezos.
“My contributions to Tezos are unrelated to Monetas and did not take anything out of Monetas,” he said to swissinfo.ch on October 30. “My contributions to the Tezos fundraiser were not funds that would have been available to Monetas. There is no conflict of interest, but a harmony of interests.”
Crypto Valley poster child
Gevers confirmed the authenticity of the investor note, which was given to swissinfo.ch by disgruntled investors. The news about Monetas will not go down well in Zug’s self-styled Crypto Valley as the start-up is held up as one of the poster-child firms in the growing fintech community.
Established in Vancouver in 2012 and moved to Zug a year later, Monetas wants to provide smartphone payment services to underbanked developing economies and is in talks with several African countries with a combined population of 300 million.
The funding shortfall has resulted in a big setback in South Africa where business partners pulled out of a Monetas venture, but Gevers told investors that negotiations were taking place to find possible replacements.
Monetas has also placed a digital payments project with the Tunisian Post Office on hold, with Gevers citing “slow progress” as a reason.
The company has also had to change from its licensing model of building applications first and then selling them, to a consultancy style of business – asking clients what they need and then building systems to match.
The firm’s business model will also change “to make it more attractive to business partners”, according to the note to investors, but no details were given. The company was downbeat on its previous expectation of earning its first revenues in the third quarter of 2017. A planned meeting of shareholders has been postponed until early next year.
“It’s been a very tough journey, especially this past year. But I will not give up until we’ve succeeded," Gevers signs off his note to investors.