StarkWare closes Series D at $8B valuation

Even if the price of ETH has decreased roughly 50% since early April, Ethereum scaling solutions continue to get funding to overcome bottlenecks that slow down the blockchain and make it expensive to use.

Israeli firm StarkWare, which builds Layer 2 scaling solutions for Ethereum, raised $100M at a $8B valuation on May 25. Greenoaks Capital and Coatue led the investment round. Tiger Global invests in Series D.

Rivals also have VC financing. In February, Sequoia Capital India led a $450m round that valued Polygon at $20B. In March, Paradigm and Andreessen Horowitz led Optimism's $150M Series B financing.

All these companies develop rollups, a data compression mechanism that bundles together batches of Ethereum transactions into a single transaction.

Rollups benefit from Ethereum's security while decreasing transaction costs and speeds them up, sidestepping blockchain concerns for years.

StarkWare's ZK-STARK rollups use zero-knowledge proofs, which protect privacy by disclosing only the time and date. Only the recipient can access transaction information. dYdX, Sorare, and Immutable X utilise StarkEx, Starkware's scaling engine. Since June 2020, it's settled $596B in deals.

StarkWare's Series C raised $2B six months earlier. Since November, the latest rise has added $1B to the company's value per month. Eli Ben-Sasson, co-founder and president of Starkware, said VCs appreciate the urgency and potential of blockchain.

When the startup discussed scaling blockchain four years ago, VCs gave it "blank glances." Not alone Polygon had raised $750,000 since its 2017 founding.

StarkWare released StarkGate alpha on May 9. The bridge connects Ethereum and StarkNet Layer 2.

These companies are looking beyond Layer 2 with hundreds of millions in capital Layer 3.