These are the two of Sandeep Nailwal, co-founder of Ethereum scaling and infrastructure development platform Polygon, who has decided to sell $450 million worth of native tokens to 40 large VC firms including Tiger Global and others with his co-founder Key reasons, SoftBank Vision Fund II and Sequoia Capital India.
Startups in the Web3 space often prefer to get funding from crypto-native VCs because they can provide technical knowledge and infrastructure. Multiple experts told ET that capital is a commodity in the space, as startups have the ability to go public on day one. This round demonstrates the growing interest of traditional funds in investing in crypto and blockchain startups, even if it means choosing non-traditional ways to invest in these companies.
According to market tracker Coinmarketcap.com, Polygon’s native token, Matic, would have a fully diluted market cap of nearly $20 billion over five years — if all its 10 billion tokens were in circulation.
In an exclusive interview with ET, Nailwal said he has been considering whether to accept institutional funding for the past six months. After all, prior to this funding round, Polygon’s funding — the money used to grow the Polygon ecosystem controlled by its founders — represented nearly 20-25% of the total token supply, or roughly $4-5 billion.
“I doubt if I should. Do we still need money? I’m even questioning whether we need institutions…but look at some of the other projects in Silicon Valley and when they are less than 10x lower than us by any organic matrix The mental space they get, I realize that this kind of institutional firepower is required,” Nerval said.
In the past three months, Nailwal has changed his mind, and he hopes to increase the company’s daily transaction volume from 4 million to 100 million in the next 18 months.
As part of its institutional round, the company sold its native token for 40% less than the average market price, which is around $2 as of this writing. Investors have a 3-year lock-up period, so 33% of investor tokens will vest each year.
“We are now moving towards a new phase of our growth, when we interact with institutions, banks and large financial entities, they don’t understand us, but they understand the language of institutions, when people like Sequoia, Softbank, Tiger are on a global scale Inside, these people are investing in us, which gives them a certain legitimacy,” Nailwal said. “Many of them will provide us with institutional thinking space that we don’t get as a non-Silicon Valley company. It’s not just about the money.”
Complete News Source : The Economic Times
