Polygon Raises $450 Million from Sequoia Among Other Investors

Polygon raised a whopping $450 million in a financing round held in February to expand its Ethereum scaling solutions services and establish a larger developer ecosystem. 

Sequoia Capital India led the round. Other major participants included Tiger Global, Softbank, Galaxy Digital, Republic Capital, Makers Fund, Alameda Research, Dune Ventures, Alexis Ohanian’s Seven Seven Six, Steadview Capital, Unacademy, Animoca Brands, Spartan Fund, Variant Fund and Kevin O’ Leary. 

Polygon aspires to be a decentralized version of Amazon Web Services in the future.

The web3 startup intends to put $100 million of the capital into an “ecosystem fund” that’ll support the creation of new projects on its network. Whereas the remaining capital will be used as “buffer money” to allow the 240-person team to continue developing the platform. 

Polygon co-founder Sandeep Nailwal said: 

“Web3 for me means ownership, censorship resistance and verified compute. Whereas companies like Facebook or Twitter control their own computations, Web3 promises “transparency” around those processes.”

Polygon and Web3 

Polygon is a major Layer 2 solution provider which offers various tools for developers to build decentralized apps while also addressing network congestion. High gas costs while minting or trading NFTs are now a prominent issue and have sparked interest in Layer 2 protocols. In order to develop solutions with low transaction fees, Polygon currently competes with companies like Arbitrum, Loopring, Optimism and Starkware. 

Furthermore, the network is a proof-of-stake blockchain running on top of the Ethereum network. Participants just need to have a stake (tokens units) to become validators. Thanks to the Layer 2 solution, the transaction rate of Polygon is much faster than Ethereum. While the Ethereum network can perform 15 transactions per second, Polygon claims to process over a thousand transactions per second. 

The blockchain’s own token, “Matic” has caught the interest of investors. The company sold token units to investors in a private round rather than issuing shares. 

The web3 firm is also pursuing blockchain gaming, having hired Ryan Wyatt, a former YouTube executive, as its game studio head.