Shares in Overstock soared in after-hours trading on Thursday on news that Hong Kong-based private equity firm GSR Capital will invest up to $270 million in the US e-commerce firm's blockchain unit, tZero.
The deal gives GSR Capital an 18% stake in tZero, valuing the blockchain venture at $1.5 billion. GSR will also buy $30 million in tZero security tokens and 3.1 million shares in Overstock at a five per cent discount on the closing price on 1 August.
News of the agreement sent Overstock share price up more than 20% in after-hours trading.
Meanwhile, tZero confirmed that it has raised $134 million in a security token offering that began in December. The unit had initially set a target of raising $250 million.
In May, tZero teamed up with BOX Digital Markets to build a regulated exchange that plans to list and publicly trade security tokens for companies that issue, or convert existing stock to, security tokens.
Saum Noursalehi, CEO, tZero, says: "The tokenisation of securities has the potential to disrupt global capital markets responsible for moving hundreds of trillions of dollars.
"Together with our partners, we will globalise our blockchain-based platform, bringing more efficiency, liquidity, and trust to capital markets."