US investor bails out bankruptcy-threatened Monetas

Monetas attracted a lot of attention as a rising star of the Swiss fintech hub, including a visit from Finance Minister Ueli Maurer last year Keystone

A ‘white knight’ investor has rescued troubled Swiss blockchain firm Monetas from threatened bankruptcy. American company Artillery One has stepped in to take a controlling stake in Monetas, heading off a potentially fatal court case, swissinfo.ch can reveal.   

Artillery One founder, Daniel P Cannon, will take over as Monetas CEO and chairman of the blockchain payments start-up. Monetas founder Johann Gevers will continue to “play an important role” on the board of directors.

Daniel Cannon has a long track record of deal making in the US Daniel Cannon

Cannon is also a managing director at Oberon Securities, but the US investment banking boutique is not involved in the Monetas deal. The intervention was enough to convince the Swiss courts to end bankruptcy proceedings on January 25, which had been put into motion in December. 

“There is very little dilution to existing shareholders. Considering that the company was literally, minutes away from liquidation, it was a good deal for all,” Cannon told swissinfo.ch. “The shareholders should be very happy to have avoided a total loss.” 

“We are putting together a strong executive team and welcome all former developers,” he added. “We will be seeking the greatest minds from around the world, to achieve our goals and identify new applications and ventures consistent with the Monetas strategy.” 

Despite buying out Gevers’s controlling stake in the company, Cannon said the founder would be kept on board. “Johann is an amazing visionary, an extremely talented and principled individual.  Johann remains on the board of directors and as a senior officer of the company who will work closely with me in implementing Monetas’s business strategy.” 

Update, February 2: 

(Johann Gevers and Daniel Cannon have issued clarifications to this article published on January 31. Gevers and Cannon will act as co-CEOs of Monetas. Gevers retains an undisclosed stake in the company, making him the second largest shareholder after Artillery One.)

Troubled times

In 2016, Monetas was held up as the poster child of the burgeoning Swiss blockchain scene. It’s new payments system promises to allow people in developing countries better access to the financial system using smartphones. 

The company attracted some CHF11 million ($11.8 million) from investors before running into severe financial difficulty last year. swissinfo.ch broke the story last October that Monetas had ground to a standstill, running out of liquidity and new investors. As a result, the company had to let go most of its staff and declared its African projects had stalled. 

Despite upbeat messages sent to investors by Gevers, a Zug court issued what looked like a death blow with the bankruptcy action at the start of December. On December 22, Artillery One intervened to settle creditor debts, which paved the way for the court to end its involuntary bankruptcy action. 

Gevers, initiator of Zug’s vaunted Crypto Valley, is also making headlines due to his involvement in an unconnected row as head of the $1 billion Zug-based Tezos Foundation fund.