Overstock turns over control of Medici Ventures

Salt Lake City-based e-commerce company Overstock.com Inc. has announced its intention to convert its blockchain subsidiary Medici Ventures Inc. to a limited partnership under a plan to eventually exit its blockchain-related investments. Pelion Venture Partners, a Cottonwood Heights venture capital firm, will assume control of Medici as general partner. Overstock will assume a role as a limited partner and minority shareholder.

After closing, Pelion will have sole authority and responsibility regarding investing decisions, appointing board members of the portfolio companies and exercising all shareholder rights for assets Medici Ventures currently holds. The partnership will have an initial eight-year life and a total capital commitment of $45 million from Pelion. The partnership will return capital to Overstock as it exits from its blockchain involvement.

“Blockchain technology represents a leap forward in fundamentally changing the way we interact and transact with each other,” said Overstock CEO Jonathan Johnson. “Since 2014, we have made investments in and advocated on behalf of companies advancing blockchain technology. We remain bullish on blockchain technology but are changing the way we interact with these assets. As we evaluated how to create the highest return for our shareholders, we determined it is time to partner with a seasoned venture capital firm to oversee the portfolio and make follow-on investment decisions. Pelion is the perfect firm to do this. It has blockchain and technology expertise with early-stage companies and has helped guide many companies to economic success.”

Overstock announced that it will continue to accept bitcoin digital currency for purchases on its retail website as an indication of its management’s belief in the technology.

“We are honored Overstock selected us to maximize the value of its blockchain assets,” said Pelion Ventures founder and general partner Blake Modersitzki. “Many of these companies have real potential. We believe our team knows how to help them reach that potential.”

Under the agreement, Medici Ventures will discontinue providing software development and design services to its portfolio companies.

Immediately following the announcement that Overstock would eventually exit its blockchain involvement, stock shares in the company were trading more than 10 percent higher on the Nasdaq exchange.