Ethereum (ETH) infrastructure provider Flashbots has raised $60 million in its Series B funding round, signaling a potential resurgence in the crypto bull market.
The funding round was led by Paradigm, a San Francisco-based technology investment firm, according to a July 21 filing with the Securities and Exchange Commission.
It is worth noting that Flashbots used a unique approach in selecting its investors.
The company conducted a “beauty contest for decentralization” where investors were chosen based on their reverse pitches.
This approach allowed the company to strategically select investors who align with its vision and goals for the future.
The funding has given Flashbots a valuation of at least $1 billion, a representative of the company reportedly told Bloomberg.
What is Flashbots?
Flashbots is a research and development organization that focuses on tackling the negative impacts of maximal extractable value (MEV), which refers to the potential profit that network operators can extract by previewing or re-ordering blockchain transactions.
The company’s software aims to minimize the effects of MEV by optimizing transactions and creating a more efficient and fair blockchain environment.
Its flagship product is the SUAVE (Single Unifying Auction for Value Expression) platform, designed to function as an independent network acting as a transaction waiting room and decentralized block builder.
Developers can use SUAVE to launch intra-block applications, such as block builders or orderflow auctions, which enable cheaper and more private transactions than those typically found on Ethereum and other chains.
The successful funding comes as crypto firms are struggling with a lack of funding amid the meteoric rise of artificial intelligence (AI), which has captured the attention of VC firms globally
In the first quarter of this year, the AI industry raised approximately $18 billion in funding, with some of that funding coming at the expense of crypto companies.
According to Evan Cheng, founder of Mysten Labs, AI startups are now receiving crypto’s share of venture capital money, the crypto veteran said during a Word on the Block interview with Forkast News.
Cheng explained that early-stage crypto companies can still raise funds, though their valuations have been hurt due to the recent crypto meltdown.
However, late-stage funding for startups has become harder, with only exceptional companies receiving support. Cheng said:
“But once you get to the late Series A and Series B stage, the growth capital is hard to come by. It has to be an exceptional startup to get funded, unless you’re in the bubble of the excitement around generative AI right now, it’s going to be a lot harder for any startup to raise money.”