ConsenSys, a cryptocurrency start-up that has profited from the boom in decentralised finance, is raising funding that would value the company at $3bn, according to people briefed on the plans.
New York-based ConsenSys develops and invests in projects built on the ethereum distributed ledger, a rival to bitcoin that can be used to create financial services apps and other automated software programmes.
ConsenSys announced in April it had raised $65m from JPMorgan, Mastercard, UBS and other investors, in what the company called a “formation round”. It declined to comment on the fundraising.
The financing would mark an important milestone for the seven-year-old company led by ethereum co-founder Joseph Lubin, who has weathered several public missteps in his attempts to capitalise on blockchain technology. Lubin has made staff cuts of more than 10 per cent at least twice, and ConsenSys restructured last year to split off its investment arm into a separate entity.
Investors have poured money into digital assets this year as the soaring price of bitcoin and other cryptocurrencies attract developers and new users to the fast-growing but risky sector.
Venture capitalists have invested $20.7bn in cryptocurrency start-ups so far this year, according to PitchBook data, an increase of more than 160 per cent from the previous record in 2018.
Lubin has mostly self-funded ConsenSys with his personal holdings of ether, the digital asset associated with ethereum.
MetaMask, an app developed by ConsenSys that is a popular gateway to decentralised finance programs, has grown rapidly as more people experiment with cryptocurrencies.
Since October 2020, MetaMask has facilitated more than $8.9bn of trading through a feature that allows users to swap pairs of digital tokens, according to data on the cryptocurrency analysis site Dune Analytics.
MetaMask takes a 0.875 per cent fee on each trade, translating to more than $78m in revenues during the same period.
ConsenSys has projected that annualised revenues from MetaMask could increase to $1bn within the next year, said one person briefed on the numbers. MetaMask has more than 10m monthly users, the company said last month.
Several other start-ups that develop apps on ethereum have recently attracted large valuations from venture capitalists.
The development team behind the popular cryptocurrency-based video game Axie Infinity on Tuesday said it had raised $152m of funding led by Andreessen Horowitz, valuing the company at $3bn.
Ether has gained more than 920 per cent in the past year, compared with a more than 400 per cent rise in the price of bitcoin.
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