Blockchain technology firm returning to Utah for major expansion, job growth
Brice Wallace
A Utah-born company will move its headquarters back to the state and add 80 high-paying jobs over the next eight years.
TZero Group Inc. made the announcement after being approved for an incentive by the Governor’s Office of Economic Opportunity (Go Utah) board at its August meeting.
“Basically, we’re committed to Utah,” Joel Quall, chief financial officer and treasurer of tZero, told the board. “Half of our employee base is located in Utah, and we want to expand in Utah. … We’ve been very happy with our workforce in Utah. It’s a great workforce. They’re dedicated, they’re committed, and we are going to make Utah our corporate headquarters.”
Quall said the company’s Utah employees are in Cottonwood Heights and the company was close to completing a lease in downtown Salt Lake City.
TZero was started in Midvale in 2014 and currently has its headquarters in New York. Go Utah documents indicate the company has 20 employees in Utah.
TZero Group and its broker-dealer subsidiaries provide a liquidity platform for private companies and assets. The company aims to democratize access to private capital markets by focusing on developing and adopting digital securities in a regulatory-compliant environment. The company offers institutional-grade solutions for issuers looking to digitize their capitalization table through blockchain technology and trade on a regulated alternative trading system.
Qualls said tZero is bringing blockchain technology to the settlement and trading of securities.
“Now it takes two days to settle a trade,” he said. “If you put it on the blockchain, you could settle within the day. And also it prevents what is perceived as ‘naked shorting’….”
Qualls noted that tZero was incubated at Salt Lake City-based Overstock.com Inc. and Medici Ventures LP, a blockchain-focused fund. Overstock.com and Cottonwood Heights-based Pelion Venture Partners each own 30 percent of tZero. Intercontinental Exchange (ICE), which made an investment in tZero in January, owns 20 percent. The chairman of the tZero board of directors is Matt Mosman, general partner at Pelion. He succeeded Jonathan Johnson, CEO of Overstock.com.
The Go Utah board approved an incentive for tZero in the form of a tax credit of up to $1.4 million over eight years. The project is expected to generate new total wages of nearly $56.7 million and new state tax revenue of nearly $9.4 million during that time. The company’s project investment is expected to top $2.2 million.
Steve Neeleman, chairman of the Go Utah board’s incentives committee, noted that the average pay of $160,000 for the incentivized jobs is more than twice the county average, “which is pretty exciting.”
“We’re happy to welcome tZero Group back to Utah,” Dan Hemmert Go Utah’s executive director, said in a prepared statement. “TZero has created an innovative and regulated platform to help make digital securities more accessible to users. We are excited for tZero’s future as the company continues to shape blockchain technologies.”
“While our involvement in this project was limited, we’re pleased that tZero Group has chosen Utah as the location for its new headquarters,” said Theresa A. Foxley, president and CEO of the Economic Development Corporation of Utah. “Utah has proven itself as a solid investment choice for both established and disruptive financial services companies to locate their operations.”
Go Utah board chair Carine Clark recused herself from the incentive vote because of her time serving as operating partner at Pelion.
Go Utah does not provide upfront cash incentives. Each year that an incentivized meets the obligations in its contract with the state, it will qualify to receive a portion of the new, additional state taxes the company paid to the state.