Ethereum (ETH) layer 2 developer StarkWare has raised another $100 million in its latest fundraising round despite falling cryptocurrency markets.
StarkWare’s Series D fundraising round brings the company’s valuation to $8 billion, a fourfold increase in value just six months after its Series C round in November 2021. Tech investment firm Greenoaks Capital led the latest fundraising round, along with private equity firm Coatue, Tiger Global and other investors.
StarkWare has established itself as a major player in the Ethereum Layer 2 scaling space, boasting higher transaction throughput than the Bitcoin network and collectively more than all other Layer 2 platforms in 2022.
The company uses rollup technology for its Ethereum Layer 2 scaling platforms. By generating validity proofs, better known as zero-knowledge proofs, StarWare claims that it is able to add massive batches of transactions to the Ethereum mainnet.
Co-founder and president Eli Ben-Sasson, along with other computer scientists, pioneered the ZK-STARK crypto. Zero-Knowledge Scalable Transparent Arguments of Knowledge is a proofing system that makes use of new-age cryptography to encrypt and verify transaction data, ensuring security, scalability, and resistance to quantum computing.
The technology behind the two StarkWare platforms, StarkEx and StarkNet, has proven to be very popular. StarkEx is the scaling engine used by the popular non-fungible marketplaces Sorare, ImmutableX, and dYdX, while StarkNet is a decentralized application development network.
Speaking to Cointelegraph, Ben-Sasson and StarkWare co-founder and CEO Uri Kolodny explained the latest round of fundraising, which has been driven by demand from outside investors in the long-term potential of layer 2 technology.
“We believe that we are on a long, challenging and demanding mission to invent and develop a technology that has not existed before and bring it to market as a software product offering with an ecosystem around it. All of that requires substantial resources that allow us to focus in the long run,” Kolodyny told Cointelegraph.
StarkWare will use its latest fundraising round of $100 million overall to build its ecosystem around the software tools it’s building.. Ben-Sasson also noted that StarkEx’s capabilities were one of the main calling cards for investors, who will see the platform remain a focal point for the company:
“Investor assessment has to be based on tried and tested metrics and the current metrics all come from StarkEx. We mint more NFTs than any other platform, we are settling more transactions today than Bitcoin and there have been weeks where we have settled more than Ethereum “.
The StarkWare president said that these metrics are reflected in the company’s $8 billion valuation and that his goal would be to build on the success of StarkEx thus far, while hoping that StarkNet will continue to attract developers.
Ben-Sasson admitted that the ability of the underlying technology to achieve its current and greater scalability was not surprising given the mathematical theory behind it.. However, credit was given to the ecosystem that StarkEx adopted:
“What’s pleasantly surprising, and much of the credit goes to the ecosystem and our initial Diversify partners, dYdX, Sorare, and ImmutableX, is the ability to take this core technology that enables computing integrity at scale and bring it to end users.” in such a successful and effective way.
The current downturn in the broader cryptocurrency markets has been a cause for concern, but the StarkWare co-founders believe their fundraising efforts signal to the broader ecosystem that savvy investors see a silver lining, despite a gloomy outlook.
Clarification: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information set forth herein should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.
Keep reading:
Investments in crypto assets are not regulated. They may not be suitable for retail investors and the full amount invested may be lost. The services or products offered are not aimed at or accessible to investors in Spain.