Chain Reaction, a Tel Aviv-based blockchain startup, announced it has raised $70 million as part of its Series C funding round. The objective of the company is to expand its engineering staff to accelerate the production of its blockchain-focused silicon and collaborate in the development of its cryptographic-focused chips.
Chain Reaction Raises $70 Million in Series C Funding Round
Chain Reaction, a startup that focuses on building blockchain-based silicon, announced that it has raised $70 million as part of its Series C funding round. The round, which was led by Morgan Creek Digital, part of Morgan Creek Capital — a VC company co-founded by crypto influencer Anthony “Pomp” Pompliano — saw the participation of Hanaco Ventures, Jerusalem Venture Partners, KCK Capital, Exor, Atreides Management, and Blue Run Ventures.
With this capital influx, the company expects to increase its engineering headcount in order to hasten the development of its blockchain silicon products, estimated to reach the market later this year. According to Alon Webman, co-founder and CEO of Chain Reaction, the mass production of the first batch of chips, called “Electrum,” will start in Q1 2023.
According to reports from Reuters, Electrum will be a highly efficient ASIC chip designed for bitcoin mining, a field dominated by companies like Bitmain. The fabless startup enrolled the services of TSMC, one of the biggest foundries in Taiwan, to mass produce the chips.
While the company did not disclose its valuation, Techcrunch estimates it to be around $500 million, having raised $115 million since its founding.
Blockchain Chips and Homomorphic Encryption
Chain Reaction aims to use its first batch of blockchain chips as a trampoline to developing more advanced silicon, designed to tackle cryptographic problems.
The more advanced chips would be centered around a technique called homomorphic encryption, which allegedly could allow them to make operations with encrypted data without decrypting it in the first place.
This could have several applications in the cryptography field, allowing for more efficient and private operations without having to put plain information in the open when working with data.
The company is optimistic about having a solution for this cryptographic issue, even with today’s limited processing capabilities. Chain Reaction co-founder and CEO Alon Webman stated:
We think our solution will make homomorphic encryption viable. We have unique architecture and we also understand the limitations on compute and memory among processors today. We have the solution needed to make it possible.
Chain Reaction expects to launch this chip sometime at the end of 2024.
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