- Matic Token raises $450 Million for Polygon, subject to a 3 year lockup and 1/3rd to be traded each year.
- Funds to be used in providing services similar to AWS with more increased web3 adoption.
- Also to be used to provide burn rate of 3-5 years for project teams across, inter alia, UK, US, India.
Polygon, the decentralized Ethereum scaling protocol used by developers to make Ethereum transactions faster and cheaper, raised $450 million from investors led by Sequoia Capital India by the private sale of its MATIC token.
SoftBank Vision Fund II was one of 40 prominent venture capital firms to participate in the fundraising, which included Tiger Global, Elevation Capital, Accel Partners, and Steadview Capital, and prominent investors like Alan Howard and Kevin O’Leary.
Polygon (Matic), founded by Sandeep Nailwal, Jayanti Kanani, and Anurag Arjun, will use the funding from Sequoia Capital India and others to consolidate its lead in the race to scale the Ethereum blockchain. The fundraising is the project’s first major financing round since it was founded in 2017.
Polygon is developing a scaling solution suite, including Polygon PoS, Polygon Edge, and Polygon Avail, similar to what Amazon Web Services provides to Web2 developers. The team is also investing in Zero-Knowledge (ZK) technology, which will be critical in onboarding the next billion Ethereum users.
“One of the reasons for this funding was to get institutional visibility in the U.S.,” said co-founder Sandeep Nailwal in an interview, citing Third Point and Accel’s participation. Additionally, the company desired increased exposure among gaming-focused funds such as Animoca and Makers Fund.
The funding is subject to a three-year lockup, with one-third of the tokens available for trading after each year. The new funds will be used to provide a “burn rate for three to five years” for six project teams spread across India, Serbia, Switzerland, the United Kingdom, and the United States.
“Technological disruption didn’t start with Web2, nor is it going to end there. That’s why we are very excited to see some of the same firms that funded the previous round of innovation now being our Web3 vision,” stated Nailwal.
Polygon is Layer 2 operator, offering tools for developers to create Decentralized apps (or dapps) and tackle the issue of network congestion, which is a growing problem on Ethereum as its popularity rises. With almost the same intention of assisting DeFi operators, crypto infra company Qredo raised $80M in Series A, recently.