Qredo CEO removed, company gets debt financing to stay afloat: Sources

Qredo QRDO -0.73% co-founder and CEO Anthony Foy has been removed from the company following an investor-led management overhaul, and Qredo has also secured debt financing to sustain its operations, two sources with knowledge of the matter told The Block.

Foy was asked to leave in an overhaul led by Qredo's Series A lead investor, 10T Holdings, said one of the two sources. Dan Tapiero's 10T Holdings, as a large shareholder of Qredo and with board representation, had the power to ask for a leadership change at the company, the source said. Foy's departure has also been disclosed in a filing to Companies House, the corporate registry in the United Kingdom.

Foy, 64, has been replaced by Qredo's chief financial officer, Duncan Payne-Shelley, 48, two sources with knowledge of the matter said. Payne-Shelley's LinkedIn profile has also been updated to show he's now both CEO and CFO of Qredo.

"In light of our recent organizational changes, we want to thank Anthony for his leadership, who recognized that now was the right time for a change," Payne-Shelley told The Block. "As we refocus to enhance efficiency and our core offerings, we remain committed to advancing the Qredo platform, protocol, and token."

"With strong investor support, we are focussed on becoming the leading, secure self-custodial solution in cryptocurrency, continuing our path of innovation and excellence," Payne-Shelley added.

A spokesperson for 10T Holdings declined to comment.

Qredo COO also out, and new board members in 

Besides Foy, Qredo's chief operating officer, Josh Goodbody, is also no longer working for the company and has been replaced by the company's chief people officer, Becky Mifsud, one of the two sources said. Goodbody confirmed his departure to The Block, saying he has shifted to Qredo Foundation as a director.

"Building out a Foundation for the Qredo Network is a signal of our continued commitment to adoption and decentralization," Goodbody said. "This is especially important in advance of the upcoming launch of Fusionchain, a Cosmos-based upgrade of the Qredo Network."

The Qredo Foundation will focus on "driving the utility of the QRDO token" alongside supporting community and ecosystem efforts to grow the adoption of the Qredo Network, Goodbody added.

Payne-Shelley confirmed Goodbody "remains a Director of the Qredo Foundation, where his work is currently focussed."

As part of its management overhaul, Qredo has also appointed two new board members in recent weeks — Thomas Sidney "Tad" Smith, Jr., former president and CEO of Sotheby's, and Raizada Bhavin Vaid, principal at 10T Holdings and 1RoundTable Partners, according to Companies House filings. Meanwhile, Stan Miroshnik, co-founder and partner at 10T Holdings and founder and managing partner at TenSquared Capital, has left the Qredo board, per the filings.

Qredo receives debt financing

Last month, The Block reported that Qredo had just six months of runway left and was seeking fresh funding and exploring potential acquisitions. The company has now received debt financing in a deal led by 10T Holdings to stay afloat, one of the two sources said. The source said the company was first offered an equity deal but rejected it, as that would have required Qredo to issue new shares and diluted ownership of existing shareholders. The details of the rejected equity deal and new debt financing remain unknown. Payne-Shelley did not comment on the financing.

Facing a financial squeeze, Qredo was forced to cut jobs twice, reducing around 50 positions in September to slash annual expenses by 35%, and laying off 50% of the remaining staff in November, as The Block previously reported.

Earlier this month, Qredo was also compelled to close down Ankex , a hybrid exchange project launched in beta in September. Michael Moro, the former chief executive of Genesis Global Capital, who was appointed to lead Ankex in April, departed from the company as a result.

Where did Qredo's Series A funds go?

Qredo was valued at $460 million when it announced it had raised $80 million in a Series A round in February 2022. However, the company's aggressive expansion and ensuing bearish market resulted in a financial crunch, said one of the two sources. In an effort to compete with rival leading custodial products like Fireblocks, BitGo, and Copper, which all had raised mega-funding rounds, Qredo pursued an aggressive strategy, the source said. This included higher spending on technology and rapid team expansion to over 220 people at one point. However, the bearish market resulted in lower market activity last year, and Qredo's product struggled to gain sufficient traction.

Now, with a slimmer headcount and debt financing in place, Qredo looks to navigate its challenges and decide its course of action for 2024 — whether to continue building its products and fundraise or get sold — the source said.

Payne-Shelley did not comment on the Series A proceeds utilization and 2024 course of action.