Polygon Lands $450M as Sequoia Capital Bets on Web3

Key Takeaways

  • Polygon has raised $450 million in an investment round led by Sequoia Capital India.
  • Polygon says it will use the capital for its ecosystem fund and to pay its team.
  • Polygon’s native token, MATIC, has surged 17% following the announcement.

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Polygon has closed a $450 million raise. Sequoia Capital, one of Silicon Valley’s oldest and most successful venture capital firms, led the round. 

Polygon Raises $450M 

Venture capital firms are taking notice of Polygon.

The Ethereum scaling solution announced it had closed a $450 million funding round Monday. Sequoia Capital India led the round, while other participants included SoftBank, Galaxy Digital, Tiger Global, Alameda Research, Animoca Brands, Spartan Fund, Dragonfly Capital, Variant Fund, and Kevin O’Leary.

Founded in 1972, Sequoia Capital is one of Silicon Valley’s oldest and most renowned venture capital firms, managing over $80 billion in assets. The firm has dabbled in crypto since 2015, making a handful of small bets in the space through its Scouts program. Its previous crypto-related investments include Polychain Capital, MetaStable, and Paradigm. However, its latest investment in Polygon is its biggest Web3 or crypto-infrastructure bet yet.

Commenting on the investment, Sequoia Managing Director Shailesh Lakhani said:

“The platform of choice to build on the blockchain today is Polygon. 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.”

According to the statement, Polygon will allocate $100 million of the newly raised money to an ecosystem fund supporting the development and onboarding of new projects on the network. The rest will reportedly be used as “buffer money” to sustain the project’s 240-person team. 

Polygon, which has a current market capitalization of around $13.3 billion, is Ethereum’s leading sidechain scaling solution. In 2021, it enjoyed a rush of interest after attracting leading Ethereum-native DeFi protocols like Aave and Curve Finance.  

Polygon has also been expanding its portfolio of Ethereum scaling technologies over the last year. In December, it acquired Mir, a startup that develops zero-knowledge proofs-based scaling solutions, for $400 million. It also acquired the EVM-compatible ZK-Rollup protocol Hermez for $200 million last year.

Due to Ethereum’s ongoing scaling challenges, projects like Polygon, the Layer 2 protocols Optimism and Arbitrum, and alternative Layer 1 blockchains such as Solana and Avalanche have seen a surge in market valuations, usage, and popularity over the last two years. Accordingly, Andreessen Horowitz, Sequoia’s arch-rival in the VC world, has poured hundreds of millions of dollars into Layer 1 protocols such as NEAR, Dfinity, Celo, and Chia over the same period.

With the Polygon bet, Sequoia is now signaling that it wants a piece of the growing Web3 pie. Following the announcement, Polygon’s native token MATIC has surged 17% on the day, up from roughly $1.80 to $1.98.

Disclosure: At the time of writing, the author of this piece owned ETH and several other cryptocurrencies.

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Crypto VC Paradigm Invests in Citadel Securities or Crypto VC Paradigm Diversifies Into TradFi World or Crypto VC Paradigm Invests in Stock Market Maker Citadel Securities

Key Takeaways

  • The crypto investment fund Paradigm, alongside VC Sequoia Capital, has taken part in a $1.15 billion investment into Citadel Securities.
  • Citadel Securities accounts for over 25% of the volume traded in U.S. equities markets, but it has faced increasing scrutiny since Robinhood restricted trading of Gamestop shares last January.
  • The market maker giant might be planning to incorporate digital assets into its business.

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Paradigm is set to take part in a $1.15 billion investment into the electronic-trading firm, Citadel Securities, with one of the United States’ largest venture capital firms, Sequoia Capital. 

A $22 Billion Valuation

One of the most prolific crypto and Web3 investors, Paradigm, has diversified into the world of traditional finance. 

Today, Citadel Securities announced that it had secured a $1.15 billion investment from the crypto and Web3 investment firm Paradigm, alongside venture capital firm Sequoia Capital. This investment represents the prolific market maker’s first outside investment, and the minority stake sold by Citadel Securities valued the firm at approximately $22 billion. 

According to Citadel Securities CEO Peng Zhao, the firm’s partnership with Paradigm and Sequoia should allow it to scale the business into new markets and bring in more talent. Moreover, according to The Wall Street Journal, the money raised could pave the way for the business to go public via initial public offering.

Citadel Securities is separately managed from Ken Griffin’s $43 billion hedge fund Citadel, but it is still majority owned by Griffin. While the hedge fund billionaire Griffin has historically been skeptical of cryptocurrencies, and his firms have not traded in them, it seems likely that Citadel Securities will incorporate digital assets into its business at some point. The Co-Founder and Managing Partner at Paradigm, Matt Huang, said that the partnership between his firm and Citadel Securities takes place “as they extend their technology and expertise to even more markets and asset classes, including crypto.” 

Paradigm has an extensive crypto, Web3 portfolio that includes Coinbase, Cosmos, Uniswap, and Ethereum scaling solutions like Optimism and Aztec. In November 2021, the firm launched the largest crypto fund of all time, $2.5 billion dedicated to Web3 projects. 

Sequoia Capital is an American VC fund with around $80 billion in assets under management, and its investments include both Google and Airbnb before either firm went public. 

Citadel Securities, majority owned by Ken Griffin who beat out ConstitutionDAO with a $43 million bid on one of the original copies of the U.S. Constitution last November, is a market maker that accounts for approximately one quarter of the volume of shares traded on the U.S. stock market each day. While business has been good for the firm since the pandemic due to increased market volatility and trading, Citadel Securities faced scrutiny following the aftermath of the Wall Street Bets and Gamestop short-squeeze frenzy in January of last year. It was accused of—allegedly—playing a major role in the trading restrictions of Gamestop shares imposed by brokerages like Robinhood. 

The investment into the traditional markets trading firm by Paradigm marks a possible diversification from crypto-related assets, but that might change if Citadel Securities eventually does foray into the crypto markets. 

Disclosure: At the time of writing, the author of this piece owned BTC, ETH, and several other cryptocurrencies. 

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Liquid staking protocol pSTAKE raises $10M from notable cryptocurrency venture capital firms and angel investors

On Tuesday, pSTAKE, a liquid staking protocol from decentralized finance (DeFi) platform Persistence, announced in a statement provided to Cointelegraph that it had closed a $10 million strategic funding round from venture capital firms. Tendermint, the core developer behind the Cosmos network, powers Persistence blockchain with its consensus engine.

Liquid staking is the practice of users “double-dipping” with their crypto assets — i.e., allowing them to stake their crypto in one pool and use their staked assets to farm yields in a liquidity provider pool, or vice versa. The process enables higher compounded yields, as assets generate returns in two pools instead of one, but it is also riskier, as investors hold multi-layer derivatives of their original token.

The funding was backed by various venture capital groups, such as Three Arrows Capital, Sequoia Capital India, Galaxy Digital, DeFiance Capital, Coinbase Ventures, Tendermint Ventures, Kraken Ventures, Alameda Research, Sino Global Capital and Spartan Group. In addition, angel investors such as Ajit Tripathi, head of institutional business development at Aave; Do Kwon, founder of


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Sequoia Software Firm to Pay Employees in Bitcoin

Sequoia Holding LLC software development and engineering company has announced that its employees can now receive a portion of their salary in cryptocurrencies. The firm said that it is starting a new program that would allow employees to choose to defer a part of their salary into Bitcoin, Ethereum, or Bitcoin Cash.

Sequoia Software Firm to Pay Employees in Bitcoin

Richard Stroupe, Jr, the CEO and co-founder of Sequoia, said:

“We’re excited to offer the members of our team this new benefit. Many of our employees are enthusiastic supporters of cryptocurrency, and we’re happy to help them gain exposure to this trillion-dollar asset class.”

Stroupe added:

“We’re proud to give the members of our team the ability to easily invest in cryptocurrency and build their savings. Cryptocurrency has emerged as an important alternative to traditional investments like stocks and bonds.”

Sequoia is set to form a partnership with a third-party payroll processing company to withhold taxes and convert the rest of the salary into cryptocurrency, which would be held in a digital wallet administered by the payment firm.

Sequoia cited the recent example demonstrated by Russel Okung, an American football offensive tackle for The Carolina Panthers of The National Football League, who made headlines for becoming the first football player to receive a part of his salary in Bitcoin. This is a similar approach that Sequoia employees intend to adopt.

The Rising Interest in Cryptocurrency

The move comes at a time when Bitcoin has performed strongly in 2020, despite the COVID-19 pandemic. Earlier this month, the leading cryptocurrency climbed to a record high of $40,000, rising by almost 900% from a recent low of $3,850 in March crash and surpassed the $20,000 level for the first time in history in mid-December.

The surge has been driven by increased demand from corporate, institutional, and more recently retail investors who view Bitcoin as a hedge against inflation and attracted by the prospect of quick gains.

With an outperforming market, several firms are climbing aboard. AT&T, Overstock, Starbucks, Microsoft, KFC Canada, and Wikipedia are some of the most popular firms accepting Bitcoin.

Image source: Shutterstock


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