Ethereum layer-2 developer StarkWare raises a further $100 million despite a gloomy outlook for the cryptocurrency space.
Ethereum (ETH) layer-2 developer StarkWare has raised a further $100 million in its latest fundraising round despite the prevailing downturn in cryptocurrency markets.
StarkWare’s series D fundraising round sees the firm’s valuation up to $8 billion, marking a four-fold increase in value just six months after its Series C round in November 2021. Tech investment firm Greenoaks Capital led the latest fundraising round in addition to 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 more transaction throughput than the Bitcoin network and collectively more than all other layer-2 platforms in 2022.
The firm makes use of rollup technology for its Ethereum layer-2 scaling platforms. By generating validity proofs, more commonly known as zero-knowledge proofs in the industry, StarWare says it is able to add massive batches of transactions to Ethereum’s mainnet.
Co-founder and president Eli Ben-Sasson pioneered ZK-STARK cryptography alongside other computer scientists. Zero-Knowledge Scalable Transparent Arguments of Knowledge is a proof system that makes use of new-age cryptography to encrypt and verify transaction data — ensuring security, scalability and resistance to quantum computing.
The technology underpinning StarkWare’s two platforms, StarkEx and StarkNet, has proven popular. StarkEx is the scaling engine used by popular nonfungible 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 unpacked the latest fundraising round, which has been driven by outsider investor demand in the long term potential of the layer-2 technology.
“We believe we’re on a long, challenging and demanding mission to invent and develop technology that hasn’t existed previously and bring it to market as a software product offering with an ecosystem around it. All that requires substantial resources to allow us to focus on the long-term,” Kolodyny told Cointelegraph.
StarkWare will use its latest $100 million fundraising round across the board to develop its ecosystem around the software tools it is building. Ben-Sasson also noted that StarkEx’s capabilities were a major drawcard for investors, which would see the platform continue to be a focal point for the firm:
“Investors evaluation has to be based on proven, tested metrics and the current metrics are all coming from StarkEx. We minted more NFTs than any other platform, we’re settling more transactions today than Bitcoin and there have been weeks where we’ve settled more than Ethereum.”
The StarkWare president said these metrics are reflected in the company’s $8 billion valuation and its goal would be to build on the success of StarkEx so far, while hoping that StarkNet continues to attract developers.
Related: MakerDAO deploys on layer-2 network StarkNet to enhance functions of DAI stablecoin
Ben-Sasson admitted that the ability of the underlying technology to achieve its current scalability and greater was not surprising given the mathematical theory behind it. However, credit was given to the ecosystem that has adopted StarkEx:
“What is pleasantly surprising, and a lot of credit goes to the ecosystem and our initial partners Diversify, dYdX, Sorare and ImmutableX , is the ability to take this core technology that allows you to get integrity of computation at scale and bring it to end users in such a successful and effective manor.”
The current downturn in the wider cryptocurrency markets has been a cause for concern, but the StarkWare co-founders believe their fundraising efforts signal to the wider ecosystem that savvy investors see a silver lining, despite a gloomy outlook.
