In a recent report by Fortune Magazine, it was revealed that Wormhole, a messaging protocol that allows developers to communicate across different blockchains, has successfully raised an impressive $225 million, valuing the project at $2.5 billion.
Notably, the fundraising represents the most significant funding round for a cryptocurrency project in 2023. While this was technically Wormhole’s first raise, the project had been under development for several years by Jump Crypto, a division of Jump Trading Group, the infrastructure development and investment company of Web3.
Wormhole Announces Launch Of Wormhole Labs
Per the report, the funding round did not have a lead investor, with participation from prominent entities such as Brevan Howard, Coinbase Ventures, Multicoin Capital, ParaFi, Dialectic, Borderless Capital, Arrington Capital, and Jump Trading.
In a departure from traditional equity investments, the investors’ stake will be in the form of token warrants, entitling them to a share of the future cryptocurrency that Wormhole plans to launch. The specifics of the token and its launch date have not yet been disclosed.
In addition to the fundraising success, the protocol also announced the establishment of Wormhole Labs, a new company that will assist in the company’s development.
This significant capital injection also marks the finalization of the separation between Wormhole and Jump Crypto. According to Fortune Magazine, the split aligns with Jump Crypto’s “downsizing strategy” amidst increased regulatory scrutiny on Jump Trading’s crypto offshoot and the broader challenges faced by the industry.
Wormhole Overcomes Hacking Setback
Wormhole, which was launched in August 2021, has encountered its fair share of challenges. In February 2022, the protocol suffered a substantial hack resulting in the loss of approximately $320 million, making it one of the largest cryptocurrency hacks in history. In response, Jump Crypto stepped in to replenish the lost funds.
Nevertheless, the subsequent regulatory landscape and market downturn in 2022 further tested Jump Crypto’s resolve. The company faced scrutiny when the US Securities and Exchange Commission (SEC) filed a lawsuit against Terraform Labs, revealing Jump Crypto’s involvement as a “third party” in support of the stablecoin TerraUSD.
Consequently, Jump Crypto withdrew from US crypto trading activities and severed ties with Robinhood, the online stock brokerage.
Protocol Development And Team Expansion
Seeking to reshape the narrative surrounding the protocol, Saeed Badreg, CEO of Wormhole Labs, expressed optimism about the transformative impact of the $225 million raise.
With the formation of Wormhole Labs in May and the subsequent departure of the core team from Jump Crypto, the company aims to focus exclusively on developing its protocol.
According to Badreg, the funding will be instrumental in expanding the team, advancing protocol development, and fostering developer adoption.
On the same note, Robinson Burkey, Chief Commercial Officer at Wormhole Foundation, views this funding milestone as an opportunity for a fresh start and the realization of the protocol’s vision.
Featured image from Shutterstock, chart from TradingView.com