Blockchain messaging protocol LayerZero raises $120 million, reaching a valuation of $3 billion

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 Tuesday.

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

“It is purely 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 online blockchains, including two non-Ethereum virtual machines (EVMs), Aptos and Solana, Pellegrino noted.

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

Since its launch 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 reach 1 million messages; then it took 2.5 months to reach the next million messages, Pellegrino said. “Everything else is evolving rapidly. By the end of this year, I’m extremely confident we’ll have single months, if not single weeks, where there are 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 participate, 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 that [capital] is largely to grow the company there, Pellegrino said. “If we want to be the team that connects everything, gaming plays a big part in that.”

In the long term, Pellegrino hopes that LayerZero’s messaging protocol, and others, will continue 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 it’s games, DeFi applications, or anything else.”