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LayerZero Labs seeks backing that would triple its valuation to $3 billion

Finance

www.theblock.co 25 May 2022 13:16, UTC
  
Reading time: ~3 m

Quick Take

  • The company raised $135 million at a $1 billion valuation as recently as late March.
  • FTX Ventures has committed to leading the latest round, according to sources.

LayerZero Labs, developer of a protocol focused on improving the flow of assets between different blockchains, is seeking additional funding just a few months after its last raise.

The Vancouver-based company has held talks with various investors in recent weeks about raising fresh funds at a valuation of $3 billion, according to people familiar with the matter. It announced a $135 million raise at a $1 billion valuation less than two months ago.

One person close to the talks said its latest raise would be denominated in equity, as well as LayerZero token warrants, and tokens native to Stargate, a cross-chain bridge protocol. 

FTX Ventures has committed to leading the $3 billion round, but it is unclear whether any other investors have agreed to participate. FTX also co-led the $135 million raise in late March, alongside Sequoia Capital and Andreessen Horowitz (a16z). Other investors in that round included Coinbase Ventures, PayPal Ventures, Tiger Global and Uniswap Labs.

LayerZero Labs co-founder and CEO Bryan Pellegrino declined to comment when reached by The Block. A spokesperson for FTX also declined to comment.

Starry-eyed

Founded in 2021, LayerZero Labs is the main developer of the LayerZero protocol, a so-called "omnichain" designed to deliver interoperability between blockchains. Its technology helps decentralized apps (dApps) build tools that can function across multiple blockchains.

After the $135 million raise, Pellegrino described the firm’s goal as to “create the generic messaging layer that underpins all interoperability between blockchains.” The funds raised in March are being used to foster the development of more dApps on the protocol.  

Earlier in March, LayerZero launched Stargate, a protocol for swapping tokens across different blockchains. It kickstarted the project with a $25 million public sale of tokens native to the Stargate bridge. The idea behind Stargate is to facilitate token transfers between blockchains with a single transaction, negating the need for cumbersome steps like locking, minting and burning, and redeeming assets.

The total value locked in the Stargate protocol grew rapidly to more than $4 billion by early April, but it has since fallen to $736 million at the time of writing, according to DeFi Llama data.

Even in an increasingly rocky market for private investment, startups trying to solve cross-chain interoperability are getting raises away. Earlier this month, Chainflip Labs — a Berlin-based startup building a cross-chain decentralized crypto exchange — raised $10 million from venture capitalists. But the $3 billion price tag LayerZero Labs is seeking may prove more challenging, with later-stage investors battening down the hatches and conserving capital.


© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.


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