StarkWare, an Israel-based blockchain specialist which commercializes a zero-knowledge proof system, has secured $30 million from high profile names within the cryptocurrency ecosystem, including Consensys, Coinbase Ventures, Intel Capital, Pantera, and Sequoia.
Zero-Knowledge Protocol Startup StarkWare Raises $30 Million
Netanya-based StarkWare Industries, which was founded in early 2018 to develop its “full proof stack for the STARK zero-knowledge protocol,” secured its first $6 million from 11 investors, including Pantera, Floodgate, and Naval Ravikant in a seed round on January 31.
The Series A round of October 28 raised $30 million from 15 investors, including Sequoia Capital, Atomico, Scalar Capital, Floodgate, Wing Venture Capital, Collaborative Fund, ConsenSys, Paradigm, Intel Capital, Pantera Capital.
The StarkWare fundraiser was the first investment led by Paradigm, a venture capital firm co-founded by Matt Huang, formerly a partner at Sequoia.
The Israeli company welcomed Paradigm’s Matt Huang to the board of directors, who will be advising the firm together with Fred Ehrsam, former co-founder of Coinbase. Ehrsam commented on the investment on Twitter.
“Zero knowledge proofs are a key primative for blockchain scalability and privacy. I can see a world where most blockchain activity goes through them. Their main challenge is being efficient enough for practical use. @StarkWareLtd is squarely focused on this problem.”
The firm was co-founded by Prof. Eli Ben-Sasson (Technion), Prof. Alessandro Chiesa (UC Berkeley), Uri Kolodny, and Michael Riabzev, who form a “world-class team of experts” in zero-knowledge proof systems and engineering. StarkWare aims to solve two of the main challenges in the blockchain space: privacy and scalability.
Co-founders Eli Ben-Sasson and Alessandro Chiesa are two of the seven Zcash founding scientists and pioneers of SNARKs, a type of zero-knowledge proof that powers the cryptocurrency. Starkware is creating the software implementations for STARKs, which produces a proof that a complex computation was done correctly.
The proof developed by the team can be verified in a fraction of the time that it takes to run the actual computation and can be bundled to create further computational efficiencies.
The importance of zero-knowledge proof is that, by ensuring a higher probability that a particular computation is valid, the nature of a transaction can remain private. These verifications are comparatively computationally light, which provides scalability to the blockchain.
Many distributed ledger application may benefit from a fully public blockchain but still need privacy at the transaction level, so STARK’s zero knowledge proof interests all kinds of market participants, from investors and traders to entrepreneurs.