Synota, a startup that wants to bring energy payments to Bitcoin’s Lightning Network, has raised $3 million in a seed round led by Ego Death Capital, a newer venture capital firm focused on the Bitcoin ecosystem.
The new capital will be used toward the commercialization of Synota’s software, including plans for a bitcoin mining-related service. Other investors in the round included Trammell Venture Partners, Rev1 Ventures, Hivemind VC, Bitcoiner Ventures and Recursive Capital, among others.
“There's certain properties that Bitcoin has, such as peer-to-peer payments and being able to have instant settlement of those payments,” Synota co-founder Austin Mitchell said during an interview with CoinDesk. “We've found a way to leverage those properties and apply them to an everyday payment for people all over the world – their gas and electric bills.”
“Our software basically has the ability for your energy meter to talk directly with your digital wallet," he continued. "It’s able to process payments and settle transactions instantly."
Synota integrates existing hardware and software products currently used by the energy industry with Bitcoin's Lightning Network. The overall idea would be for an energy company to end up with a smart network of production and consumption nodes. The network could see that higher energy production heading in one direction would require more payments to flow the other way, minimizing payment lags and cutting back-office costs.
“Bitcoin and energy are synonymous, merging over time due to positive incentives for energy producers,” said Ego Death Capital founding partner Andi Pitt in an email. “Synota intends to accelerate the integration of these two fundamental aspects of the new global financial system. “
Founded in 2022 by Mitchell and Lisa Scott, Synota will initially have a business-to-business focus on industrial users and energy companies, but the startup plans to expand to cover more types of energy transactions. Synota’s first commercial site should be up and running later this year. Pay-as-you-go transactions for bitcoin miners should become available in early 2023.
Read more: What is Bitcoin’s Lightning Network?
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.