Startups

BitTorrent is selling for $140M to Justin Sun and his blockchain startup Tron

Comment

Image Credits: BitTorrent (opens in a new window) under a license.

BitTorrent, an early mover (and currently the largest player) in decentralised computing architecture to distribute and store data, is being sold for $140 million in cash to Justin Sun and his blockchain media startup Tron, according to multiple sources close to the deal, who spoke to TechCrunch.

Variety earlier this week reported that a sale of the company to Sun closed last week, without naming a price, following rumors that circulated for at least a month that the two were in negotiations.

Shareholders have now been sent the paperwork to sign off on the deal, and that has detailed the $140 million price — which includes both a cash payment from Sun as well as cash in the company being distributed to shareholders alongside proceeds. Some are, we understand, still disputing the terms, as more than one person claims to have made the introduction between Sun and BitTorrent. A source says it’s unlikely that the disputes will actually kill the acquisition, given how long BitTorrent has been looking for a buyer.

BitTorrent most recently said it has about 170 million users of its products. Currently, these include its main client and BitTorrent Now. The latter is focused on video, music and other creative content. BitTorrent claims that its protocols move as much as 40 percent of the world’s Internet traffic on a typical day, making it the largest decentralised application around at the moment.

Tron is one of the new kids on the block in the wide world of blockchain startups. Founded by Sun, who previously had worked for Ripple (a settlement system built on blockchain tech), Tron says its mission is to build “a truly decentralized Internet and its infrastructure.” That has included (no surprises here) the creation of its own cryptocurrency, the TRX. TRX, loosely, appears to be a cryptocoin for the entertainment industry. Tron has plans to use TRX as a way to pay for content on its network, according to this whitepaper.

TRX is also intended for simple trading. The company has launched a MainNet distributed ledger for transactions, with its own TRX migrating to the MainNet starting later this week. Tron says that the market cap for all TRX is currently valued at just under $4.6 billion with the value of a single TRX coin $0.045.

Neither Tron, Justin Sun, nor representatives for BitTorrent responded to our requests for comment, so it’s not completely confirmed how Tron plans to use BitTorrent.

But one shareholder we spoke to says there are two plans. First, it will be used to “legitimise” Tron’s business, which has met with some controversy: it has been accused of plagiarising FileCoin and Ethereum in the development of its technology. And second, as a potential network to help mine coins, using BitTorrent’s P2P architecture and wide network of users.

The acquisition will close off a tumultuous but also interesting life for BitTorrent, founded in 2004 by Bram Cohen and Ashwin Navin to commercialise peer-to-peer networking technology as a way to share and store files.

BitTorrent was a trailblazer in considering how decentralised network architectures using all the machines in a network as nodes — in contrast with the server-based architectures that dominate the tech world today — could be used to share, store and backup data. Some believe this is a more secure system overall because there is no central repository to hack.

Yet the company has also become synonymous with “file sharing” and all the pros and cons that have come with that. Most notably, it has fought long against a bad rap for torrenting technology — which can be used to share copyrighted files illegally — by positioning itself as creator-friendly, buying in content rights, and establishing a range of products built on the P2P protocol. It also used its architecture to take a stand on privacy on the web at the height of the NSA controversy.

But while BitTorrent makes revenues — it hadn’t raised money since 2008 — its strategy to build a long-term larger business on that technology never really took off as investors and others hoped it would. That resulted in a number of management changes and a couple of reshuffles of its product as its leaders looked for the killer app. Some of its earlier product efforts are still around: BitTorrent’s enterprise services were spun off into a standalone company now called Resilio, led by BitTorrent’s former CTO and CEO, Eric Klinger.

(Side note: Interestingly, both Cohen and Navin are still following the trajectory of decentralisation that has led to the rise of blockchain, and that led Tron to BitTorrent. Cohen is building “eco-friendly” cryptocurrency Chia, and Navin, as the CEO of measurement and analytics provider Samba TV, is building a cryptocurrency to incentivise users to share more of their viewership data.)

Despite the current buzz for decentralised architectures around blockchain, we understand that BitTorrent had been looking for a buyer for a while. Long ago, one source told us, both Akamai and Rovi (which is now TiVo) had both considered buying BitTorrent but nothing came to pass. Akamai instead acquired Red Swoosh, a BitTorrent competitor that was Travis Kalanick’s first startup before Uber, and Rovi moved on in its own direction.

More recently, offers were less forthcoming, although there was interest from other crypto companies in addition to Tron. The company had raised around $60 million in funding in the last 14 years, according to PitchBook data, which notes that it had been valued around $145 million at its peak. Its investors have included DCM, Accel and DAG.

We will update this story as we learn more.

More TechCrunch

Welcome back to TechCrunch’s Week in Review. This week had two major events from OpenAI and Google. OpenAI’s spring update event saw the reveal of its new model, GPT-4o, which…

OpenAI and Google lay out their competing AI visions

Expedia says Rathi Murthy and Sreenivas Rachamadugu, respectively its CTO and senior vice president of core services product & engineering, are no longer employed at the travel booking company. In…

Expedia says two execs dismissed after ‘violation of company policy’

When Jeffrey Wang posted to X asking if anyone wanted to go in on an order of fancy-but-affordable office nap pods, he didn’t expect the post to go viral.

With AI startups booming, nap pods and Silicon Valley hustle culture are back

OpenAI’s Superalignment team, responsible for developing ways to govern and steer “superintelligent” AI systems, was promised 20% of the company’s compute resources, according to a person from that team. But…

OpenAI created a team to control ‘superintelligent’ AI — then let it wither, source says

A new crop of early-stage startups — along with some recent VC investments — illustrates a niche emerging in the autonomous vehicle technology sector. Unlike the companies bringing robotaxis to…

VCs and the military are fueling self-driving startups that don’t need roads

When the founders of Sagetap, Sahil Khanna and Kevin Hughes, started working at early-stage enterprise software startups, they were surprised to find that the companies they worked at were trying…

Deal Dive: Sagetap looks to bring enterprise software sales into the 21st century

Keeping up with an industry as fast-moving as AI is a tall order. So until an AI can do it for you, here’s a handy roundup of recent stories in the world…

This Week in AI: OpenAI moves away from safety

After Apple loosened its App Store guidelines to permit game emulators, the retro game emulator Delta — an app 10 years in the making — hit the top of the…

Adobe comes after indie game emulator Delta for copying its logo

Meta is once again taking on its competitors by developing a feature that borrows concepts from others — in this case, BeReal and Snapchat. The company is developing a feature…

Meta’s latest experiment borrows from BeReal’s and Snapchat’s core ideas

Welcome to Startups Weekly! We’ve been drowning in AI news this week, with Google’s I/O setting the pace. And Elon Musk rages against the machine.

Startups Weekly: It’s the dawning of the age of AI — plus,  Musk is raging against the machine

IndieBio’s Bay Area incubator is about to debut its 15th cohort of biotech startups. We took special note of a few, which were making some major, bordering on ludicrous, claims…

IndieBio’s SF incubator lineup is making some wild biotech promises

YouTube TV has announced that its multiview feature for watching four streams at once is now available on Android phones and tablets. The Android launch comes two months after YouTube…

YouTube TV’s ‘multiview’ feature is now available on Android phones and tablets

Featured Article

Two Santa Cruz students uncover security bug that could let millions do their laundry for free

CSC ServiceWorks provides laundry machines to thousands of residential homes and universities, but the company ignored requests to fix a security bug.

1 day ago
Two Santa Cruz students uncover security bug that could let millions do their laundry for free

TechCrunch Disrupt 2024 is just around the corner, and the buzz is palpable. But what if we told you there’s a chance for you to not just attend, but also…

Harness the TechCrunch Effect: Host a Side Event at Disrupt 2024

Decks are all about telling a compelling story and Goodcarbon does a good job on that front. But there’s important information missing too.

Pitch Deck Teardown: Goodcarbon’s $5.5M seed deck

Slack is making it difficult for its customers if they want the company to stop using its data for model training.

Slack under attack over sneaky AI training policy

A Texas-based company that provides health insurance and benefit plans disclosed a data breach affecting almost 2.5 million people, some of whom had their Social Security number stolen. WebTPA said…

Healthcare company WebTPA discloses breach affecting 2.5 million people

Featured Article

Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Microsoft won’t be facing antitrust scrutiny in the U.K. over its recent investment into French AI startup Mistral AI.

2 days ago
Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Ember has partnered with HSBC in the U.K. so that the bank’s business customers can access Ember’s services from their online accounts.

Embedded finance is still trendy as accounting automation startup Ember partners with HSBC UK

Kudos uses AI to figure out consumer spending habits so it can then provide more personalized financial advice, like maximizing rewards and utilizing credit effectively.

Kudos lands $10M for an AI smart wallet that picks the best credit card for purchases

The EU’s warning comes after Microsoft failed to respond to a legally binding request for information that focused on its generative AI tools.

EU warns Microsoft it could be fined billions over missing GenAI risk info

The prospects for troubled banking-as-a-service startup Synapse have gone from bad to worse this week after a United States Trustee filed an emergency motion on Wednesday.  The trustee is asking…

A US Trustee wants troubled fintech Synapse to be liquidated via Chapter 7 bankruptcy, cites ‘gross mismanagement’

U.K.-based Seraphim Space is spinning up its 13th accelerator program, with nine participating companies working on a range of tech from propulsion to in-space manufacturing and space situational awareness. The…

Seraphim’s latest space accelerator welcomes nine companies

OpenAI has reached a deal with Reddit to use the social news site’s data for training AI models. In a blog post on OpenAI’s press relations site, the company said…

OpenAI inks deal to train AI on Reddit data

X users will now be able to discover posts from new Communities that are trending directly from an Explore tab within the section.

X pushes more users to Communities

For Mark Zuckerberg’s 40th birthday, his wife got him a photoshoot. Zuckerberg gives the camera a sly smile as he sits amid a carefully crafted re-creation of his childhood bedroom.…

Mark Zuckerberg’s makeover: Midlife crisis or carefully crafted rebrand?

Strava announced a slew of features, including AI to weed out leaderboard cheats, a new ‘family’ subscription plan, dark mode and more.

Strava taps AI to weed out leaderboard cheats, unveils ‘family’ plan, dark mode and more

We all fall down sometimes. Astronauts are no exception. You need to be in peak physical condition for space travel, but bulky space suits and lower gravity levels can be…

Astronauts fall over. Robotic limbs can help them back up.

Microsoft will launch its custom Cobalt 100 chips to customers as a public preview at its Build conference next week, TechCrunch has learned. In an analyst briefing ahead of Build,…

Microsoft’s custom Cobalt chips will come to Azure next week

What a wild week for transportation news! It was a smorgasbord of news that seemed to touch every sector and theme in transportation.

Tesla keeps cutting jobs and the feds probe Waymo