5ire faces refunds, in-fighting, and angry investors as mainnet launch looms

A blockchain firm that became an Indian unicorn in 2022 is now looking more like a tired nag.

Dubai-headquartered 5ire, which was valued at US$1.5 billion just last year, is refunding money to angry investors, faces questions about its main investor, and is dealing with internal conflicts that drove a co-founder to leave.

5ire founders (from left) Vilma Mattila, CEO Pratik Gauri, and then-CTO Prateek Dwivedi / Photo credit: Mattila’s Instagram, Gauri’s Facebook, and Dwivedi’s LinkedIn

It also appears that 5ire could miss the previously announced date to launch its mainnet.

Utkarsh Amitabh, chief marketing officer at 5ire, confirmed to Tech in Asia via email that the company had offered a one-time refund to investors, saying that the amount is “below 5%” of its investments from token holders. However, he did not explain whether that figure represents the number of investors or the amount refunded.

Amitabh added that the refund, which he described as a “goodwill gesture towards our community,” does not apply to equity holders.

But good will seems in short supply among some of 5ire’s investors. Faraj Abutalibov, chief commercial officer of Venom Blockchain and co-founder of FD Capital, said he was not seeking a refund on his investment. But he noted that among the investors he knew, the general sentiment was “bad.”

According to Abutalibov, limited updates on the project during the crypto winter helped fuel FUD – fear, uncertainty, and doubt – among investors. Changes in 5ire’s tokenomics, which were announced in April and allocated more returns to validators, also caused complaints.

An investor who only identified himself as Alexander said those changes made him unhappy, so he requested and received a refund from 5ire.

But Alexander also had concerns about the management team, and he thought that 5ire promoting itself as a US$1.5 billion unicorn was “nonsense.”

What is 5ire worth?

The blockchain company first made international headlines in July 2022, when UK-headquartered Sram & Mram announced a US$1.5 billion valuation and a US$100 million investment. The series A valuation made 5ire a “unicorn” in less than a year after it was established.

While 5ire received its initial tranche of US$20 million last year, it now claims that additional funding isn’t necessary as it still has money from the first infusion.

Amitabh told Tech in Asia that 5ire had raised US$121 million, but he did not give a breakdown of the investments.

It is unclear how Sram & Mram calculated the US$1.5 billion valuation for 5ire. Sram & Mram claims that it determined the valuation internally, while 5ire CEO Pratik Gauri told Tech in Asia last year that the valuation was conducted by a third party. Neither company had provided documentation for the valuation, claiming confidentiality agreements.

What happened to due diligence?

On the outside