Major boost for Ethereum as Polygon plans $450m raise led by Sequoia India

Blockchain infrastructure development company, Polygon is to raise $450 million in its first major venture financing round led by Sequoia Capital India.

Investors who participated in the token purchase include Tiger Global and SoftBank in the lead and Galaxy Digital, Republic Capital, Makers Fund, Alameda Research, Alan Howard, Alexis Ohanian, Steadview Capital, Elevation Capital, Animoca Brands, Spartan Fund, Dragonfly Capital, Variant Fund, Sino Global Capital, and Kevin O’Leary.

What does this investment mean for Ethereum?

This round is highly significant in shaping what the future of Ethereum will look like, as many of the investors are putting their money in the space for the first time, according to data from Web3 Signal.

This deal could also bring to an end the perception of Ethereum in India which made many South Asian VCs deny Polygon their backing in recent years.

The deal is the culmination of talks between Polygon and the capital venture firms that started in December last year. TechCrunch reported at the time that the firms were “looking to purchase tokens worth $50 million to $150 million.”

Polygon, which was previously Matic, has gradually established itself as the mainstay in the Ethereum world, in part by refusing to increase the gas fee on its platform, which has helped it to process transactions upward of $7.5 million per day, the firm said in a blog post.

According to the report, the firm will use this investment to “aggressively expands its portfolio of Ethereum scaling solutions and works to attract the larger developer ecosystem.”

Polyon’s rise to the top

Polygon has been gradually diversifying its offerings and operations for years, spending over $1 billion acquiring other firms, moving from Plasma, a method of moving information off the Ethereum blockchain to zero knowledge rollups, optimistic rollups, and many others.

In an interview, Sandeep Nailwal, a co-founder of Polygon said that they are very cleared eyed about the path they are taking with the firm.

“We don’t want to become approach-specific or technology-specific. Our goal is to provide internet-level scale to decentralized computation that blockchains are providing,” he said.

Why the round

Polygon has over time experienced a rise in decentralised apps especially in the NFT space like OpenSea and Uniswap being deployed on its main network making it a go-to to build on the blockchain.

“The platform of choice to build on the blockchain today is Polygon,” Shailesh Lakhani, the MD of Sequoia India, said in a statement.

“Thousands of developers across a range of applications are choosing Polygon and their complete set of scaling solutions for the Ethereum ecosystem, 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.”