Indian blockchain start-up Polygon bags $450 mn from Sequoia, Tiger Global

Blockchain start-up Polygon has raised $450 million (around Rs 3,400 crore) at a valuation of around $10 billion, making it the biggest funding round in the Web3 (crypto and blockchain) space in India, and one with the highest valuation.

The funding was raised through a private sale of its native MATIC token in a funding round led by Sequoia Capital India with participation from SoftBank, Tiger Global, and others.

Polygon is an Ethereum scaling platform that enables developers to build scalable DApps (decentralised apps) with low transaction fees without sacrificing on security. Jaynti Kanani, Sandeep Nailwal, and Anurag Arjun co-founded Polygon (formerly Matic) in 2017 to solve the problem of high fees and slow transactions on the Ethereum blockchain. The current market capitalisation of Matic, which is the native crypto token of Polygon, is $14.6 billion – down 28 per cent from its lifetime high of $20.4 billion, which it hit in December 2021.

“Web3 builds on the early Internet’s open-source ideals, enabling users to create the value, control the network and reap the rewards. Ethereum, scaled by Polygon, will be the bedrock of this next stage in the Web’s evolution,” said Polygon co-founder Sandeep Naiwal.

“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,” the Polygon team said.

The start-up is building a complete suite of solutions that is similar to what Amazon Web Services offers Web2 developers — a tool for every possible use case and scaling at a click of a button. For Web3, Polygon PoS already offers an execution layer with low fees and high transaction throughput secured by the Ethereum mainnet.

With Polygon Edge, projects are building custom blockchains from scratch. In the near future, Polygon Avail will deliver the general-purpose, scalable data availability piece of the puzzle and ZK solutions will make network congestion a thing of the past first and then tackle applications around privacy.

“The platform of choice to build on the blockchain today is Polygon. Thousands of developers across a range of applications are choosing Polygon and their complete set of scaling solutions for the Ethereum ecosystem,” said Shailesh Lakhani, managing director of Sequoia India. “This is an ambitious and aggressive team, one that values innovation at its core. Sequoia Capital India is thrilled to lead this significant financing round.”

“With this war chest, the core team can secure Polygon’s lead in paving the way for mass adoption of Web3 applications, a race that we believe will result in Ethereum prevailing over alternative blockchains. The funds will also allow Polygon to continue investing in cutting-edge zero knowledge (ZK) technology that will be key to onboarding the next billion users to Web3,” the company said.

“Impressive as that roster is, Polygon has always been a community-first project and owes its success to the ecosystem of early believers, developers and stakeholders. This will not change. The core team sees this investment round as the tide that lifts all boats and a testament to the importance of community in making Web3 a reality,” it added.

Ethereum’s most pressing question is how to increase the network’s capacity to handle more transactions. The skyrocketing popularity of new applications in decentralised finance (DeFi) and non-fungible tokens (NFTs) brought with it congestion and soaring fees. Polygon has stepped in with a broad range of scaling options and transaction rates that are among the industry’s lowest.