StarkWare, Ethereum Layer 2 Developer, Looking to Triple Value to $6B

StarkWare Fundraises $100M for a $6B Value

Investors are showing big interest in one of Ethereum’s most anticipated Layer 2 projects.

According to an Israeli newspaper report, the situation was as follows: CalcalistechStarkWare, a ZK-Rollup scaling technology provider StarkWare, is currently raising at minimum $100 million at a $6B valuation.

This latest round of funding, which is still ongoing three months after StarkWare raised $50m at a valuation $2 billion, follows StarkWare’s previous fundraising round. This round was closed by Sequoia, a top venture capital firm, along with participation from Paradigm. Three Arrows Capital and Alameda Research. Some of the startup’s shareholders include Coinbase, Intel, Mobileye CEO and Intel senior VP Amnon Shashua, and Ethereum co-founder Vitalik Buterin. In March 2017, StarkWare raised $75 Million in a Series A funding round, led by Paradigm. 

The Israeli startup, despite having rejected many investment offers, is now reportedly seeking at least $100 million in new capital. This would bring its $2 billion valuation up to $6 billion. A company insider spoke out on condition of anonymity to comment on the rumored raise. Crypto Briefing:

“From what we hear, there are loads of approaches from potential investors. Most aren’t accepted, but we have a sense that something interesting may be in the works. It’s hard to think back to early November, just before the $2 billion valuation and StarkNet coming to mainnet. Interest from devs and investors shot up. So a valuation that would’ve been hard to believe a few months ago just might now be realistic.”

StarkWare refused to provide any information about interested investors or how they would use the new capital. However, a representative stated that StarkWare is currently focusing its ZK-Rollup-based StarkEx product. 

StarkEx leverages ZK–STARKs, also known to be zero-knowledge, scalable and transparent arguments of knowledge to help Ethereum scale. StarkEx can achieve more than 100,000 transactions per second at significantly lower transaction fees.

Ethereum has had well-documented scaling problems in the last year. This has caused competing Layer 1 Blockchains like Terra and Avalanche to gain popularity amid rising gas costs on the top smart contracts network. The so-called “alternative Layer 1” networks captured a significant portion of Ethereum’s market share and user base as retail interest in cryptocurrencies peaked in late 2021. Rather than scaling the base chain, Ethereum has committed to leveraging various sidechains and Layer 2 solutions like StarkWare’s StarkEx to stay competitive. 

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