Connext Labs announced a $7.5 million strategic round on Wednesday at a $250 million valuation, with backers including Polychain Capital, NGC Ventures, Polygon Ventures.
Connext Labs raises $7.5 million at $250 million valuation
San Francisco-based Connext Labs has announced a successful $7.5 million strategic funding round, backed by prominent investors such as Polychain Capital, NGC Ventures, and Polygon Ventures.
The company, which raised $12 million in a series A funding round last year, aims to address the challenge of blockchain compatibility and scalability. Connext Labs proposes to act as the “HTTP of Web3,” connecting various blockchains and enabling seamless interactions between them.
In an exclusive interview with Fortune, Connext founder Arjun Bhuptani explained that the current narrative in the blockchain space revolves around the inability of existing infrastructure to scale and accommodate the growing demand.
To overcome this, Connext advocates for horizontal scaling through the operation of multiple blockchains in parallel. The company’s platform facilitates interactions across different blockchains, allowing decentralized applications like decentralized exchanges to access users on various blockchains, including Bitcoin, Ethereum, and Solana. Bhuptani also highlighted the increasing specialization of blockchains, such as Filecoin for storage and Sei for trading.
While other projects like Polkadot and Circle’s cross-chain transfer protocol focus on interweaving blockchains, Connext differentiates itself by leveraging the existing infrastructure of each blockchain. Instead of building an entire ecosystem from scratch, Connext provides a protocol that enables interoperability.
Bhuptani emphasized that the new funding will be used to further decentralize Connext through the establishment of a foundation, supporting community-led initiatives and expanding the platform’s reach.
Connext is planning to launch its own token later this year. Unlike most cryptocurrencies that are typically built on a single blockchain and then ported to others, Connext aims to develop a chain-agnostic token from the outset.
The company is working on a standard for cross-chain tokens that can function across different ecosystems, positioning itself as a pioneer in this approach.
However, Connext and other projects aiming to build across multiple blockchains face regulatory challenges in the United States. Following recent lawsuits by the Securities and Exchange Commission against Coinbase and Binance, altcoins like Solana and Polygon experienced a decline in value.
Bhuptani acknowledged the flight towards more established chains but emphasized the necessity of embracing the fragmentation of applications and users across different ecosystems, ultimately connecting them together.
With its latest funding, Connext Labs is poised to advance its mission of facilitating blockchain compatibility and scalability while navigating the regulatory landscape.
The company’s protocol-centric approach, combined with its commitment to community-driven initiatives, sets the stage for a future where interconnected blockchains can effectively operate and communicate with one another.
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