Civil, a blockchain startup that has partnered with Forbes and The Associated Press, failed to reach the $8 million minimum target it set for its initial coin offering this week, suggesting an end to the days when promoters simply had to hint at collaborations with established companies to woo investors.
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A ‘Setback’ Rather Than a ‘Shock’
The team developing Civil, a self-defined journalism platform that aims to publish news content on its blockchain, has revealed that it will provide full refunds to the 1,012 people who took part in the ICO. It had initially planned to sell 34 million of its CVL tokens for between $8 million and $24 million. However, it had raised less than $1.5 million by the time it wrapped up the sale.
Matthew Iles, the CEO of Civil, hinted at what he thinks might have been the problem by thanking the people who “were willing to jump through the hoops required to buy CVL tokens.” He also promised that the team had started planning a “much simpler token sale.”
Last week, the Wall Street Journal reported that the startup had reached out to news organizations such as The New York Times, The Washington Post and Dow Jones for support. However, it only encountered skepticism over its promises to fix the funding problems plaguing the journalism industry.
“It’s a setback for us, though not a shock,” Iles said. “We expected a different outcome when we launched the sale, but circumstances changed.”
Not Giving Up Just Yet
Despite the failure of its token sale, the Civil Foundation — a nonprofit entity designed to back independent newsrooms — still has a $3.5 million commitment from Consensys, which is why the team insists it is not raising the white flag just yet. In addition, both AP and Forbes have reportedly confirmed to Techcrunch that the failed ICO won’t impact their relationship with the project.
“The Civil Media Company is here to stay,” Iles claimed. “We’re here to build, and we’re excited for this new beginning.”
ICO projects fail all the time, of course. But Civil’s stumble is particularly notable because the platform recently grabbed headlines due to its partnership with two mainstream media organizations. Nonetheless, it still failed to reach its conservative minimum funding threshold, in spite of its high-profile connections. Perhaps investors did not see any value in the promise that Forbes would begin to publish metadata from some of its articles on the Civil blockchain in the coming year.
Are ICO investors becoming more selective in general, or is the Civil debacle a unique case? Share your thoughts in the comments section below.
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