Immutable, the cyrpto/blockchain start-up co-founded by Rich Listers Robbie and James Ferguson, slashes employee share price

An Immutable spokesman denied the change had anything to do with the company’s valuation and was instead intended to ensure its employees had “skin in the game” with the company.

“This is entirely driven by our intention to ensure new and existing employees have substantial exposure to the upside of the company as a reward for their important contributions,” the spokesman said.

“We’ve really listened to candidate and employee feedback over the last nine months, and what came out of that listening exercise was that our [employee share option scheme] program wasn’t achieving its primary goals of attracting and motivating talent.”

Immutable runs a platform for games and NFTs on the blockchain from third parties and has a handful of its own online trading card games.

Its spokesman said the share pricing change had successfully helped it recruit more staff, though the company already had a reputation for high salaries.

He pointed to Immutable’s rising token value, the games on its platform and partnerships in the industry.

Immutable revealed its $3.5 billion valuation in a funding round in early 2022representing a deal struck at the height of the technology bubble.

In the 2021-22 financial year, it made $27 million in revenue but spent $83 million, including $45 million on employee and contractor costs, which would have caused a substantial loss if not for a massive mark-up in Immutable’s own crypto holdings.

The company has since undertaken some redundancy rounds.

Tough times for blockchain

The blockchain and crypto sector is going through a tough time. Some of its biggest companies, including Coinbase and Binance, are facing lawsuits from American regulators, while investor enthusiasm has moved on from so-called web3 companies to those working on artificial intelligence products.

One senior Australian venture capitalist, who spoke anonymously to avoid jeopardising relationships in the industry, said blockchain companies were having their valuations cut harder than other start-ups.

But he said that the change in Immutable’s share pricing change did not necessarily indicate a cut to its valuation.

“Both things can be true at the same time,” the VC said. “It could be a good way of incentivising employees and the value [of the company] could suck, but it might not be related.”

Two of Immutable’s backers, Zebediah Rice from King River Capital and Danny Gilligan of Reinventure, said they supported the company’s share price move to attract and reward staff.

Mr Gilligan said he encouraged companies to have as low a strike price as possible.

Asked in an interview whether he still believed Immutable was worth $3.5 billion, Mr Gilligan said: “I can’t possibly give you that view right now,” while Mr Rice said in a written statement that he does not comment on individual company valuations.

“Immutable has always thrived through crypto winters and this one is no exception,” Mr Rice said.