VCs Eye Investment in Polygon

According to three persons familiar with the subject, a number of investors, including Sequoia Capital India and Steadview Capital, are in discussions to buy tokens from Polygon, which maintains a framework for developing and connecting Ethereum-compatible blockchain networks. The investors want to buy tokens worth $50 million to $150 million, according to individuals who asked to remain anonymous since the conversations are confidential. 

Investors will be able to purchase the coins at a little discount, as is typical in token transactions. According to what I have heard, there is a 20% discount on MATIC’s average pricing for the last month.) Because the discussions are still underway, the parameters may alter. At the beginning of last week, no one had made a comment.

Polygon, originally known as Matic, has become one of the most widely used layer two solutions. The company, which a market capitalization of over $14 billion, processes over 7.5 million transactions per day and allows hundreds of decentralized apps to continue using Ethereum as the settlement layer while avoiding the rising gas tax. Some of the major bluechip enterprises that have deployed on Polygon, which has collected one of the largest developer ecosystems, include Aave, Sushi Swap, and Curve Finance (even when compared to some layer one blockchains).

Polygon, located in India, has failed to secure support from most significant venture companies in the South Asian market until recently. An investment will signify a turnaround in investors’ perceptions of Polygon. (It is also worth remembering that most VCs in India were not actively watching the web3 area until a few quarters ago.)

According to two people familiar with the situation, Polygon has had to deal with at least one instance when some of its early investors demanded their money back during a bad market. The company was able to survive by returning money to some of those investors. “It’s one of the Polygon team’s motifs.” “Their endurance is incredible,” a former coworker stated.

Polygon, which received funding from entrepreneur and investor Mark Cuban earlier this year, is one of dozens of side-chains and roll-up networks betting on Ethereum’s continued dominance, even as a handful of other layer one projects, such as Polkadot and Solana, which are backed by Multicoin Capital and A16z, try to court the nascent but rapidly growing developer ecosystem.

Polygon co-founder Sandeep Nailwal (shown above) noted on the Bankless podcast earlier this year that the web3 developer environment today centered on Ethereum, and he is hoping that the network effect would not disappear. Nailwal and Mihailo Bjelic, another Polygon co-founder, revealed on the same podcast that Polygon is expanding its products to establish a blockchain infrastructure.