Polygon raises $450 million in funding round led by Sequoia Capital India

Layer 2 Ethereum scaling solutions start-up Polygon, founded by Indian technologists Jaynti Kanani, Sandeep Nailwal and Anurag Arjun, has raised $450 million at an undisclosed valuation.

The funding round was led by the by Sequoia Capital India with participation from more than 40 major venture capital firms, including SoftBank Vision Fund 2, Galaxy Digital, Galaxy Interactive, Tiger Global, Republic Capital and prominent investors like Alan Howard (Brevan Howard co-founder) and Kevin O’Leary (Mr. Wonderful from ABC's Shark Tank). The company said this is the first major financing round since the project’s funding in 2017.

The funds will be raised through a private sale of Polygon’s native MATIC token. Made in India MATIC crypto tokens are listed on global crypto exchanges and are counted amongst the top 15 digital assets globally.

This will allow the team to consolidate its lead in the race to scale Ethereum, obviating the need for alternative blockchains and paving the way for mass adoption of Web3 applications. Polygon is building a suite of scaling solutions, including Polygon PoS, Polygon Edge and Polygon Avail that is similar to what Amazon Web Services offers Web2 developers -- a tool for every possible use case. The team is also investing in cutting-edge zero knowledge (ZK) technology that will be key to onboarding the next billion users to Ethereum, it said in a statement.

"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 Nailwal.

"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," he added.

Nailwal said the company aims to provide scalability and affordability when it comes to Ethereum transactions with L2 blockchain technology.

The most pressing question for the Ethereum community has been 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, the statement added.

Over the past year, Polygon has attracted some of the biggest projects in Web3, from DeFi protocols such as lending platform Aave to luxury brands company Dolce & Gabbana and NFT marketplaces including OpenSea and Mark Cuban’s Lazy.com. Virtual worlds such as Decentraland and Animoca Brands’ The Sandbox are also laying the groundwork for the metaverse on the network. More than 7,000 decentralised apps (dApps) are currently building on Polygon, making it the main destination for Web3 platforms and developers, the company claimed.

Polygon said that its network has more than 130 million unique addresses and over 2.67 million monthly active users now generate some 3 million transactions per day, more than double the volume of Ethereum. Polygon’s native MATIC token has a market capitalisation of over $12 billion.