Blockchain infrastructure provider Blockdaemon raises new $5.5 million round

Blockdaemon has secured $5.5 million in new funding from VC firms Hashkey, CoinShares, Blockchain.com, Kenetic, SPiCE VC, and Fenbushi Capital. The startup offers a suite of tools and a marketplace that facilitates the process of deploying and managing a blockchain node or staking validator. The perceived benefit is clients like developers, exchanges, or custodians would not have to spend time and resources spinning up and maintaining a node from scratch. Instead, these projects or firms can focus on their core competencies. Blockdaemon intends to use the new funds to continue its expansion into the Asian and European markets.

Why it matters:

• As we described in our 2020 Theses, 2019 was a banner year for some of the pre-requisite building blocks. A multitude of new managed node providers, including Blockdaemon, launched or expanded operations to offer a more robust service than ConsenSys’s Infura. This race has picked up some steam over the last six to eight months, with Bison Trails raising $25.5 million in Nov. 2019 and Alchemy securing a $15 million round in Dec. 2019.
• Exchange staking services still threaten the existence of smaller staking service providers. But the recent partnership between Coinbase Custody and Bison Trails indicates exchanges are realizing they might be better off outsourcing validator management if they aren’t already. It might still be tough o compete with exchanges running a standalone validator; therefore, the picks and shovels model employed by node infrastructure providers could be a viable alternative.