Business 5 December 2018Paul How
Overstock subsidiary buys $2.5M stake in blockchain agri firm
Medici Ventures, a wholly-owned subsidiary of Overstock.com, Inc., has purchased a 10% stake worth $2.5 million in Grainchain, a blockchain software provider that facilitates payments in the agricultural sector.
According to the terms of the acquisition, Medici will have the option to purchase another 10% in the company at a later date.
Grainchain said in its press release that currently, small- to medium-sized farms were behind much of agricultural output worldwide, and that these lacked the resources for more modernized and secure transactions. This is where blockchain technology is seen to help, while cutting middlemen and allowing farmers to keep more earnings.
“At the end of the day, we’re just leveling the playing field for the farmer, giving them much more power and control over the selling process,” Grainchain CEO Luis Macias said.
At present, Grainchain offers its services in the U.S. and Mexico, but said that the Medici acquisition will allow for an expansion of operations to Central and South America.
Medici President Jonathan Johnson said of the investment, “Producers operate on razor-thin margins and are up against a host of factors far beyond their control… GrainChain helps to support those producers by simplifying and securing the measuring and payment process and bringing unprecedented transparency to the industry.”
Grainchain was founded in 2013, and uses a three-part blockchain-based system to eliminate error and fraud in the process of delivering goods to end-users. According to the company, smart contracts are used between buyers and sellers, and Internet of Things (IoT) devices measure both weight and quality of grains at each step of the way. According to its website, the company has facilitated about 84,000 transactions with over 1,400 active participants, and has overseen the processing of nearly 5.3 billion pounds of various commodities.
While Overstock is most known as a retailer, it has also invested in blockchain through subsidiary Medici, which also holds a stake in VinX, a company that tracks wine futures through blockchain. It has been estimated that about 20% of wine worldwide is labeled fraudulently, which makes blockchain a potential alternative to present tracking systems for wine.
Overstock has also invested in tZero, a new exchange specifically for the selling of tokens.
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