Funding Wrap: Investors bet on a cross-chain future

Plus, a $315 million fund eyes crypto and PayPal Ventures uses PYUSD for an investment

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It is sometimes said that the future is multichain. The world of venture capital seemed to agree this week, with multiple startups focused on helping crypto move between blockchains announcing funding rounds. 

Delegate Labs announced $9 million in seed funding from Arrington XRP Capital, Electric Capital, Variant and others. With the fresh capital, Delegate is building a cross-chain name service protocol named Clusters. 

Clusters lets users pick a name that can be used across different wallets and blockchains. The platform is built on interoperability protocol LayerZero, itself a venture darling having most recently raised a $120 million Series B in April 2023. 

In a blog post, LayerZero said Clusters’ features are “very similar to what [Ethereum Name Service] does, but for many chains, natively.”

Read more: Google Cloud is LayerZero’s new default oracle operator

Elsewhere, a cross-chain routing protocol named Squid announced a $4 million strategic funding round. This round is spearheaded by Polychain and features contributions from a variety of crypto-focused venture firms.

Routers act as bridges for interoperability, enabling different blockchain networks to communicate and transfer assets directly. This helps to streamline transactions and eliminates the need for centralized exchanges or complex bridging solutions.

Squid supports swaps for more than 60 blockchains on its app, and it recently released cross-chain NFT minting and collecting. In a blog post, Squid said it intends to expand its integrations with dapps “from DeFi to gaming.”

Read more: What are the differences between parallel EVMs and Arbitrum Stylus?

Earlier this week, Blockworks reported that the bitcoin-focused DeFi project Portal raised $34 million to develop a decentralized exchange (DEX). This platform aims to utilize atomic swaps, a technology for directly transferring assets between blockchains.

The atomic swap DEX is still yet to launch after Portal raised on the same premise in 2021, which has ruffled some retail investor feathers.

Read more: Portal raises $34M for atomic swaps while DEX is still in testnet

Portal isn’t the only case this week to see funding come before a product launch. Cube.Exchange raised a $12 million Series A for its yet-unlaunched trading platform meant to protect users from founder risk.

Uncorrelated Ventures raises a $315 million fund

Palo Alto-based VC firm Uncorrelated Ventures has raised $315 million for a new fund, 20% of which will go toward crypto, the firm’s general partner told Bloomberg. 

It’s another sign crypto venture funding may be turning around, especially seeing as Uncorrelated only made one public crypto investment in 2023. Its crypto portfolio includes crypto brokerage Hidden Road and DeFi marketplace Archimedes.

Uncorrelated Ventures isn’t the only VC firm loading up on dry powder for crypto. Lightspeed Faction raised a $285 million blockchain-focused fund in November 2023. 

Read more: Lightspeed Faction raises $285M crypto fund despite broader VC decline

Other notable fundraises

  • PayPal Ventures used some of PayPal’s stablecoin to make a $6.5 million investment in crypto transfer and payment platform Mesh
  • Once-maligned NFT project Pixelmon raised a $8 million strategic round.
  • “Social party game” developer Forgotten Playland raised $7 million with participation from The Spartan Group and others.

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