Stellar buys Chain, a Blockchain Company
Chain, one of the hottest blockchain startups, has sold to Lightyear, the commercial arm of the Stellar Development Foundation, which is the nonprofit behind the Stellar network and cryptocurrency XLM Stellar Lumens.
That may sound like a mouthful. It may also look like a surprising move for a fast-growing company that counts Citigroup, Nasdaq, and Visa among its clients. As Chain CEO Adam Ludwin acknowledges about Lightyear, “We are being acquired by an entity that no one has ever really heard of.”
Ludwin explained the strategy behind selling the company. (Read on for the interview, after some background on Chain and Stellar.)
Chain builds private blockchains for enterprise clients — internal ledgers that allow them to digitize assets faster and with less friction. Chain was launched in 2014 and has raised $44 million in venture funding.
Stellar is a blockchain protocol for facilitating cross-border payments and digital asset exchanges, and lumens (XLM) is the network’s native cryptocurrency. (The price of XLM is down 66% so far this year amidst the larger crypto market rout.) Stellar was incubated at the payments startup Stripe, then spun out; IBM, Deloitte, and messaging app Kik are some of the bigger names using Stellar.
In the race to get banks on blockchain, Stellar competes with Ripple, among other with similar purposes. And the same man created both Stellar and Ripple: Jed McCaleb, who also cofounded the infamous bitcoin exchange Mt. Gox.
Lightyear and Chain will combine and be called Interstellar; the Chain branding will go away. Interstellar will focus on helping companies build on top of the Stellar network. Ludwin will be CEO of Interstellar, McCaleb will be CTO, and all of Chain’s 30 employees are staying, totaling 60 Interstellar employees. The parties are not disclosing the terms of the deal, but Chain’s investors are all getting cashed out.