Always nice when you wake up to your stock options roughly doubling in value overnight (predilution of course). In the past 24 hours, ConsenSys announced a new $450 million Series D raise at a $7 billion valuation. Interestingly, a sizeable amount of the proceeds will be converted to ETH in order to rebalance the ratio of ETH to USD.
By valuation, ConsenSys is now one of the top crypto companies. This valuation is completely justified by what ConsenSys delivers for the crypto space.
While most crypto native funds were unfortunately left out of the round likely because of how much capital was required to participate, leading crypto fund ParaFi did lead the round. Other investors in the round include Third Point, SoftBank's Vision Fund 2, Microsoft, Sound Ventures, Temasek, and more.
How the valuation was justified
MetaMask's user base has skyrocketed this past year, and now the leading crypto wallet has more than 30 million MAUs, which is 42% more active users than they had four months ago. The top markets for MetaMask are the US, the Philippines, Brazil, Germany, and Nigeria.
Furthermore, Infura now has 430,000 developers utilizing the product, which is an increase from 350,000 in November. More than $1 trillion in annualized on-chain ETH transaction volume is supported by Infura's API.
Today, ConsenSys' strategy is mainly driven by Infura and MetaMask. I do not see that changing anytime in the near future.
What the funding will be used for
ConsenSys is looking to grow its headcount from approximately 700 to over 1,000 in 2022. Furthermore, ConsenSys will be completely redesigning MetaMask for a later 2022 release, in addition to enabling the wallet to integrate with other blockchains. Infura is also looking to support more blockchains than just Ethereum by the end of 2022.
Additionally, ConsenSys will focus on the continued development of MetaMask Institutional to ensure it can appropriately service institutional clients. Finally, ConsenSys is looking to eventually decentralize its products, and thus resources will be allocated to continuing to build out a team that can design tokens to execute upon this decentralization.
ConsenSys has stated that in its future rounds, it will actually take investment directly in ETH as a symbol of their commitment to the crypto paradigm shift.
ConsenSys now ranks in the top most valuable crypto companies. While behind exchanges, which are valued in the $10s of billions to $100s of billions, ConsenSys still ranks in the top for infrastructure providers, with companies like Fireblocks roughly having the same valuation.
Despite being one of the main supporters of the Ethereum ecosystem, ConsenSys is clearly looking to expand and support other blockchains. Additionally, the company will be devoting a significant amount of resources to support an institutional audience, expanding beyond its largely crypto native retail userbase.
Finally, ConsenSys does still believe in progressively decentralizing its products, which is in line with the Web 3.0 ethos. How long that takes is the real question.
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