Polygon raises $450 million from Sequoia Capital India, others to scale Ethereum

Mumbai: Polygon, a secondary scaling solution founded by three Indians for the Ethereum blockchain, has raised $450 million in a round led by Sequoia Capital India. The fund was raised through a private sale of Polygon’s native Matic token.

SoftBank Vision Fund II was among the 40 marquee venture capital firms, including Tiger Global, Elevation Capital, Accel Partners and Steadview Capital, that participated in the fundraising. Polygon’s market capitalisation was over $13 billion at the time of going to press, with 1 token selling for about $2 a piece, according to Coingecko.com.

The company, founded by Sandeep Nailwal, Jaynti Kanani and Anurag Arjun, had received a “sizable investment” from US-based billionaire Mark Cuban last year. It onboarded Mihailo Bjelic from Serbia as a cofounder last year. In 2019, Polygon's token was distributed through Binance’s Initial Exchange Offering, and the startup had raised over $5 million. The team will use the latest funds to consolidate its lead in the race to scale Ethereum, the company said in a statement.



Polygon is building a suite of scaling solutions—including Polygon PoS, Polygon Edge and Polygon Avail—which is similar to what Amazon Web Services offers Web2 developers. The team is also investing in zero knowledge (ZK) technology that will be key to onboarding the next billion users to Ethereum.

It purchased Ethereum scaling startup Mir Protocol for $400 million last year.

“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," Polygon cofounder Naiwal said in a statement on Monday. “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.”

Polygon is offering a range of solutions to combat high transaction cost and congestion on Ethereum, which has fast become popular due to new applications in decentralised finance (DeFi) and non-fungible tokens (NFTs) using it to build applications.

Over the past year, Polygon has attracted some projects in Web3, from DeFi protocols such as lending platform Aave to luxury brands company Dolce & Gabbana, and NFT firms like OpenSea and Mark Cuban’s Lazy.com. It said more than 7,000 decentralised apps (dApps) are currently building on Polygon.

“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 at Sequoia Capital 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.”

The network claims to have over 130 million unique addresses. Its over 2.67 million monthly active users generate some 3 million transactions per day, more than double the volume of Ethereum. To make sure the growth can continue into the foreseeable future, Polygon is making major investments in zero knowledge cryptography.