Starkware’s Series C Layer 2 Scaling Solution, Crypto Unicorn

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Blockchain Scaling Protocol StarkWare raised $ 50 million in a Series C fundraiser led by Sequoia Capital. This fundraiser came just seven months after his $ 75 million Series B round. The four-year-old company is now valued at $ 2 billion. Check out the pitch deck slides he used to raise funds.

Blockchain-scale-up startup StarkWare just raised $ 50 million in a Series C funding round led by venture capital firm Sequoia Capital, bringing the total funding for the four-year company to more than $ 160 million.

The Israel-based company offers a layer two scaling solution for ethereum, which is currently the most popular blockchain for decentralized applications.

Despite Ethereum’s rapid rise, it is plagued by a number of issues due to its proof of work consensus mechanism. Transactions are slow and gas fees are high, which creates problems for users doing small transactions, whether it’s buying a non-fungible token (NFT) or playing a game based on the blockchain.

Ethereum is currently in the process of moving to a proof-of-stake mechanism, known as ethereum 2.0, to address some of these issues. But over the years, several companies have also developed Ethereum scaling solutions, called Layer Two Protocols, to address some of these issues.

The ‘aha’ moment came for the founders of StarkWare after the ethereum game CryptoKitties released in the middle of the 2017/2018 bull run when he couldn’t handle a sudden surge of interest.

Ethereum has lost scalability while providing a lack of trust, an essential component of blockchain technology where it is not necessary to trust a third party, said Uri Kolodny, co-founder and CEO of StarkWare.

“As long as it can’t even support this fun little game, then what hope is there for us, for the grand vision to move the whole economy and social activity onto this infrastructure? “Kolodny said.

To address this issue, the team continued to build through the “crypto winter,” a prolonged bear market between late 2017 and most of 2018, to create a scaling solution for Ethereum. The solution is based on zero-knowledge evidence, a cryptographic authentication method that proves something is known without directly revealing the known information.

“Everyone in the ecosystem knew that blockchains were here to stay, even though this is a bear market and our technology [will be] really necessary when it goes to reach the masses, ”said Eli Ben-Sasson, co-founder and chairman of StarkWare.

Encryption applications such as the Fantasy Sorare football platform and the decentralized encryption exchange dYdX have leveraged the services of Starkware to help manage scalability between users.

The founders managed to lift this round seven months after a $ 75 million Series B.

Sequoia, the lead investor in this round, has invested in Starkware since its Series A. Although it is considered a more traditional venture capital firm, known for backing Apple and PayPal, Sequoia has impressed the Starkware team with its understanding of the protocol. countryside.

Other Series C investors also include Paradigm and Three Arrows Capital. Minimal pitch was involved as most investors participated in previous rounds. The StarkWare team shared five slides with Insider containing statistics and data that were at the heart of discussions with investors.

“StarkWare has really taken off over the past few months as projects like dYdX, Sorare, Immutable and many more have taken off. a partner at Sequoia, in an email. “We saw that traction and wanted to help the team go even faster.”

The new funds will be spent on hiring and building an ecosystem around StarkNet, its unauthorized scaling solution.

For Ben-Sasson and Kolodny, seeing this vision come true is a moving experience. In the mid-90s, they were told that zero-knowledge evidence was an abstract concept with few real-world use cases. Now, they are able to use them to tackle blockchain’s biggest challenges.

Here are the slides used by StarkWare: StarkWare StarkWare StarkWare StarkWare StarkWare

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