Nischal Shetty, co-founder of Indian crypto exchange WazirX, is raising capital for a new venture, despite his previous one coming under scrutiny from authorities.
With the expectation of raising $20 million to $30 million during the seed financing round, Shetty hopes his blockchain startup Shardeum could be valued at $200 million, anonymous sources told TechCrunch.
Prominent investors participating in this round include the Spartan Group, Struck Crypto, Big Brain Holdings and Cogitent Ventures, the sources said.
Although Shetty confirmed that the startup was raising capital, he added that the round had yet to finish. “We are currently working with top VCs in an ongoing funding round,” he said in a statement. “We look forward to sharing more details on how we’re working to turbocharge the expansion of our team and accelerate Web3 adoption for developers and their users.”
Shardeum takes its name from the technique called sharding, in which a network is partitioned into shards, enabling more transactions to be processed, verified and validated in parallel.
Shardeum anticipates that it will be able to process over 100,000 transactions per second with 100,000 nodes and will maintain a latency of 10 seconds, according to an investor deck.
Other features of the blockchain include the use of both proof-of-stake and proof-of-quorum consensus mechanisms to reduce the cost of running the network. It will also rely on three types of nodes in its network, validator, archival and standby.
According to the anonymous sources, the startup will initially target emerging markets including India, with a mainnet launch expected in the quarter starting Oct.
The move comes as authorities in India have been putting greater pressure on Shetty and his first venture, WazirX. Earlier this month, the Indian Ministry of Finance confirmed that the crypto exchange was being investigated for money laundering and flouting foreign exchange rules.
Pankaj Chaudhary, Minister of State for Finance, confirmed in the Parliamentary Upper House that the Directorate of Enforcement is looking into claims that over $350 million was laundered through the Binance-backed exchange.
Later that week, the Enforcement Directorate (ED) froze the bank account of one of the directors of Zanmai Lab, operator of WazirX, in which assets worth over $8 million were locked up after the agency conducted a raid in Hyderabad.
The resulting bad press even caused erstwhile owner Binance Holdings to distance itself from the Indian exchange.