An Andreessen Horowitz-backed startup bent on bringing blockchain technology to the corporate world has managed to raise new funds, despite the bear market in digital assets.
Bastion, co-founded by two former executives with Andreessen’s crypto division, came out of stealth mode Monday with a seeded funding round worth $25 million led by a16z crypto. Investors also include Nomura Group’s Laser Digital Ventures, Robot Ventures and crypto influencer Packy McCormick’s Not Boring Capital, among others.
Founders, Riyaz Faizullabhoy and Nassim Eddequiouaq — respectively, the former chief technology officer and chief security officer of the venture capital firm’s crypto arm — are looking to conquer the hurdles for traditional companies to get unto the new decentralized version of the internet based on blockchain, known as “web3.” They plan to handle custody and wallets in compliance with global regulations, as well as digital transaction execution.
“It was clear that even as crypto came back down into another bear market, this time crypto is very much here to stay,” Faizullabhoy said in an interview.
In the eyes of its fans in Silicon Valley, web3 is supposed to take over web2 — a category that came to include wildly successful platforms like Facebook, and YouTube — eventually. And while the crypto slump has hobbled demand for web3, Bastion’s co-founders still see a strong appetite from companies across the fashion, education and social media sectors to enter the blockchain. The firm wants to help bring on “the next billion” new users, they said.
“We’ve long held the view that for web3 to reach its full potential, the space needs compliant, secure custodial wallet infrastructure for NFTs and tokens,” Arianna Simpson, general partner at a16z crypto said in a statement, “Bastion is building exactly this.”
The startup will face challenges in navigating the complicated regulatory environment, especially in the US, as regulators crack down on the industry. Eddequiouaq said the company’s first hires included regulatory and compliance executives from crypto exchanges like Kraken.
The newcomer will also face competition in an already-crowded market. Several startups in crypto provide similar services such as custody solution provider Fireblocks. Fireblocks was selected as the partner of several financial institutions including Bank of New York Mellon Corp. to build their own platforms to hold and transfer digital assets.
