Flashbots, a provider of infrastructure for Ethereum (ETH), has secured $60 million in a Series B financing round, hinting at a potential revival in the cryptocurrency bull trend.
San Francisco’s tech investment entity, Paradigm, spearheaded this funding initiative, as stated in a filing with the Securities and Exchange Commission dated July 21.
Interestingly, Flashbots adopted an unconventional method to pick its investors.
They organized a “decentralization beauty contest,” where investors were selected based on their counter-pitches.
Such a strategy ensured the inclusion of investors who resonate with the company’s long-term objectives and vision.
Following this investment, Flashbots’ valuation has reportedly reached or surpassed the $1 billion mark, as conveyed to Bloomberg by a company spokesperson.
What is Flashbots?
Flashbots is an R&D entity dedicated to mitigating the adverse effects of maximal extractable value (MEV). MEV pertains to the potential earnings that network overseers can garner by previewing or rearranging blockchain-based transactions.
The company’s proprietary software targets the diminution of MEV’s influence by refining transaction processes, thereby fostering a more equitable and effective blockchain landscape.
Their principal offering is the SUAVE (Single Unifying Auction for Value Expression) platform. It’s devised to operate as a standalone network, serving as both a transaction holding area and a decentralized block constructor.
Developers can utilize SUAVE to initiate intra-block functionalities, including block formation tools or order-flow auctions. These capabilities facilitate more cost-effective and confidential transactions compared to what’s standard on Ethereum and similar platforms.
This funding achievement stands out, particularly when numerous crypto enterprises are grappling with funding shortages. This is in light of the skyrocketing prominence of artificial intelligence (AI), which is currently a magnet for venture capitalists worldwide.
In the year’s opening quarter, the AI sector garnered an impressive $18 billion in investments. A portion of this capital infusion might have otherwise been directed towards crypto ventures.
Evan Cheng, the founder of Mysten Labs, noted in a “Word on the Block” interview with Forkast News, that AI-driven startups seem to be claiming the venture capital previously earmarked for crypto.
Cheng clarified that while budding crypto enterprises still have opportunities for fundraising, their market evaluations have suffered, mainly due to the recent downturn in the crypto sector.
As for advanced-stage financing, the landscape is more challenging. Only standout companies are securing these funds. Cheng elaborated:
“For those reaching the later phases of Series A and Series B, acquiring growth capital becomes quite a challenge. Only truly remarkable startups secure such funding. Unless you’re amid the current fervor surrounding generative AI, the fundraising journey for any startup becomes considerably tougher.”