Sequoia Capital led a $450 million investment round for blockchain network Polygon as part of its efforts to catch up with other venture capital investment companies betting on future technologies.
Other venture capital companies, including Sequoia Capital rival Andreessen Horowitz, have been investing in blockchain and cryptocurrency-related technologies, betting big that they may become the future of commerce and the internet. Sequoia Capital is betting big on Polygon, a blockchain that acts as a supporting layer for Ethereum, which allows it to process transactions at scale.
Sequoia Capital is particularly interested in Polygon's efforts to develop a technology that it claimed would be the future of the internet - Web3. The concept refers to the company's efforts to develop a more decentralized version of the internet using yet-to-be-developed and existing blockchain technologies.
Web3 has sparked a lot of discussion in Silicon Valley, but major players have mostly criticized the concept. Twitter co-founder Jack Dorsey said the technology is like a centralized entity controlled mostly by venture capitalists, while Tesla CEO Elon Musk has claimed it was nothing more than a marketing "buzzword" than anything else.
Despite the criticisms, Web3 has attracted some of the most well-known venture capital firms, including Andreessen Horowitz, Tiger Global, and Sequoia Capital. Sequoia has been pretty modest about its involvement in cryptocurrency, whereas Andreessen has its own dedicated crypto fund.
Sequoia India's managing director, Shailesh Lakhani, said they chose to invest in Polygon because of its "comprehensive set of scaling solutions" currently being used for the Ethereum network.
Polygon, like Ethereum and other blockchains, has its own coin, Matic. Rather than issuing fresh shares, the business held a private round in which it sold token units to investors.
Polygon investors are betting that as the network's popularity grows, its digital currency's value will rise as well. SoftBank, Galaxy Digital, and Tiger Global also invested with Sequoia's India unit during the funding round.
The deal follows in the footsteps of Solana Labs, the company behind Ethereum competitor Solana, which earned $314 million in a private token sale supported by Andreessen Horowitz.
Polygon aspires to be the platform on which major corporations may build their own Web3 strategy. On its network, brands like Adidas and Prada are already experimenting with NFTs.
Polygon co-founder Sandeep Nailwal claims that not all companies are on board with cryptocurrencies yet, but some are slowly showing interest in NFTs. Nailwal said he plans to make Polygon the decentralized version of Amazon Web Services in the future.
