Polygon raises $450M funding round led by Sequoia Capital India, SoftBank and Tiger Global
Polygon has raised $450 million in a new venture financing round as the firm, with a market cap approx $13 billion. its portfolio of Ethereum scaling solution works to attract the larger developer ecosystem.
Sequoia Capital India led Polygon's first major financing round Tiger Global and SoftBank as well Galaxy digital, Republic Capital, Market Fund, Alameda Research, Alan Howard, Dune Ventures, Alexis Ohanian’s Seven Seven Six, Steadview Capital, Unacademy, Elevation Capital, Animoca Brands, Spartan Fund, Dragonfly Capital, Variant Fund, Sino Global Capital and Kevin O’Leary also participated in the private token purchase
The first time many of these investors are making a bet on an Ethereum scaling solution or broadly on the blockchain infrastructure play, according to Web 3 Signals, a website that tracks venture investment in the crypto space.
An early December announcement TechCrunch report outlined some of the early details of the deal.
Ethereum has attracted the largest developer ecosystem for any blockchain, but it's plagued by slow speeds and high transaction costs.
Polygon is among a handful of so-called Layer 2 or side-chain firms that are attempting to help Ethereum's network solve its growing pains by employing techniques to move a wide range of transaction information off the blockchain.
Ethereum blockchain allows Polygon to pack more transaction details on an Ethereum block and significantly scale the number of transactions it can process.
Polygon has focused on a technique called Plasma to move information of the Ethereum blockchain, but the firm has in recent years expanded its focus on multiple technologies.
Sandeep Nailwal is co-founder of Polygon said in an interview with TechCrunch that The Polygon has spent approx $1 billion in recent quarters to acquire firms to broaden its offerings,
Matic network was building Plasma solutions, he said "Although" 10 to 15 teams raised money on the Plasma hype, we were the only team that shipped a proper product with Plasma capabilities."
"The overall community reached the consensus that there are certain limitations to this approach so they moved to the optimistic rollup." Then they moved to rollup. Then palladium. We have realized that we don't want to play these cycles we want to build a platform that slays there for decades to come."
Nailwal drew parallels with this race to the desktop operating system wars we saw for more than a decade. "we don't want to become approach-specific or technology-specific" our goal is to provide internet level scale to decentralized compilation that blockchain is providing.
Polygon which counts Mark Cuban among its backers has emerged as one of the clear leaders among the Layer 2 or side chain projects attempting to help Ethereum scale. As of January 20, the platform had processed more than 23 million blocks and 1.3 billion transactions. The rise in its popularity comes to fast adoption in the past year. Over 7,000 decentralized applications including Defi platform Aave, Curve, Sushiswap, Pool, Uniswap, and giant NFT marketplace OpenSea, and metaverse projects Decentraland and Sandbox have deployed on Polygon.
Shailesh Lakhani, managing director at Sequoia India, in a statement "The platform of choice to build on the blockchain today is Polygon, Thousands of developers across a range of applications are choosing Polygon and their complete set of scaling solutions for the Ethereum ecosystem, "
The major funding is a lump-around story for Polygon, which its early years struggled to attract VCs. Many founders are said they believes that Polygon its technology prowess and speed of execution was discounted earlier by others because the team was largely based in India.
Jayanti Kanani is a co-founder of Polygon said that "We are not new." We have been working very hard since 2017. We were written off until last year, which had raised just $750,000 in VC funding prior to the new round. He recalled a conversation when the startup was struggling to raise money at less than a $30 million valuation.
"In the last year," the community started to notice us after we brought so many applications and many of them went viral. In Silicon valley projects we had to do the bottom-up grind, full Indian style. I think that's also sustainable in the long term.
He said bringing institutional investors will help Polygon with brand building and in striking partnerships.
"We have a very liquid token in the market and a decent treasury," we didn't require the market to raise funds. As the global market begins to look into the crypto world. we realized that even as by organic metrics. daily active users, transactions volume we are 5 to 10 times bigger than Solana and 20 times bigger than Avalanche, we don't have as much visibility as we should. The projects I mentioned have been able to do a lot of institutions-led marketing."
The funding will also help to Build a large Polygon developer ecosystem in several markets.
"We wanted to have at least 3 to 5 years of well-cushioned runway for them." The startup, which maintains a $100 million ecosystem fund, will also use the fresh capital to support and broaden such efforts with more accelerators, hackathons, and grants, he said.
in the future, Polygon has planning to make it on the identity space, Nailwal said, "The goal of Polygon is to become the AWS of Web3, AWS of Web3 will need an identity segment." So we will be making some efforts in this space.
Kanani said investors will also help Polygon hire big names, pointing to the recent hire of Ryan Wyatt, who handed YouTube Gaming as an example.