Blockchain messaging protocol LayerZero raises $120M, hitting $3B valuation

LayerZero Labs, a web3 messaging protocol, has closed a $120 million Series B round, raising its valuation to $3 billion from $1 billion, the company said on Tuesday.

Unlike Web 2.0 messaging platforms like WhatsApp and Telegram, this messaging protocol lets users send different types of messages between blockchains, like cross-chain interactions, eliminating the need for intermediaries.

“It’s pure arbitrary data; it’s like internet-packaged messaging between computers, not like instant messaging,” Bryan Pellegrino, CEO and co-founder of LayerZero Labs, told TechCrunch. “It’s the movement of data.”

LayerZero connects over 30 mainnet blockchains, including two non-Ethereum Virtual Machines (EVMs), Aptos and Solana, Pellegrino noted.

The protocol is used by on-chain applications like decentralized exchanges, including the likes of PancakeSwap, Sushiswap, Trader Joe and Uniswap. The platform has secured over $7 billion in total value locked and processed over $6 billion in transactional volume, the startup said.

Since launching about a year ago, “hundreds of thousands of unique users” have used the protocol, Pellegrino said.

It took the protocol about 7.5 months to hit 1 million messages; then it took 2.5 months to hit the next million messages, Pellegrino said. “Everything else is rapidly evolving. By the end of this year, I’m extremely confident that we’ll have single months, if not single weeks, where there’s a million messages.”

The round was raised for “purely strategic alignment,” Pellegrino said — meaning they didn’t really need the money. The Series B round saw 33 investors participating, including a16z crypto, Circle Ventures, Sequoia Capital, OpenSea, Samsung Next, Christie’s and BOND. The company, which previously raised $135 million in March 2022, has raised over $250 million to date, he added.

“We wanted to make a push into gaming and the APAC market, and all of this [capital] is largely to grow the company there,” Pellegrino said. “If we want to be that layer that connects everything, gaming plays a huge role in that.”

In the long-term, Pellegrino hopes LayerZero’s messaging protocol, and others, continues to create the infrastructure that allows applications to build more complex structures. “Our job is to build the primitive that allows developers to create the best systems they can, whether its games, DeFi applications or something else.”