Lending startup Parallel Finance raised $22 million in a Series A funding round that valued the polkadot- and kusama-focused decentralized finance (DeFi) protocol at $150 million.
The round, one of the single-largest hauls for a project building on Polkadot’s multi-chain network, comes just months after Parallel’s $2 million pre-seed round of funding. Polychain Capital led the round with participation from Lightspeed Venture Partners, Slow Ventures, Blockchain Capital and Alameda Research.
Parallel looks to bolster growth as a DeFi alternative to Ethereum, the market leader despite low processing speed and high fees. Polkadot, a competing ecosystem that plugs into multiple blockchains, doesn’t yet have as robust a protocol landscape.
Parallel’s answer is a suite of automated market making, staking and derivatives services for polkadot as well as its staging-ground counterpart, kusama.
Project founder Yubo Ruan said Parallel has amassed 3,000 users in the five months after launch. Many of them are institutional – his backers included.
“The reason that we bring a lot of investors – especially Polychain leading the round – is because they are one of the largest DOT holders and kusama (KSM) holders. They want to have yield in this space, they want to have use of DeFi protocols” he said.
He said Polychain and its VC counterparts received Parallel’s governance tokens in lieu of traditional equity payouts. “We plan to do an equity [round in a] holding company in the future once we launch the protocol,” said Ruan.
Ruan said Parallel plans to double its staff in the next six months. Right now it wields 20 full-timers; five months ago it was just him.
The heady growth is necessary to keep up with expansion demands: Ruan wants to hire specialty engineers that can build for ecosystems other than just Polkadot. Ruan said Parallel will become an umbrella “brand” with footholds across multiple blockchains.
“We believe in a multichain future. Polkadot is one of them that will do well, Ethereum is going to do well too, solana is going to do well. Whenever we find problems in the space related to DeFi,” that’s where Parallel will build, he said.
Each project will be its own entity.
“This $150 million valuation is only for the Polkadot chain,” he said.
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