A new funding round is set to lift the valuation of Merkle Manufactory — the company behind the social network Farcaster — to the $1 billion mark, according to a Bloomberg report citing sources familiar with the matter.
Leading the round is crypto investment firm Paradigm, whose portfolio includes major crypto firms, such as Coinbase, Blur, dYdX, Compound and Citadel Securities.
Merkle was co-founded in 2020 by former Coinbase executives Dan Romero and Varun Srinivasan. The company’s flagship is the social media application Warpcast, built on top of the decentralized network for social media apps Farcaster.
Romero confirmed in a post on March 28 that Merkle is raising capital. “Wanted to let everyone know that Merkle Manufactory is closing a new round of financing.” Paradigm has not confirmed its involvement. Merkle raised $30 million from venture capital firm a16z crypto in July 2022.
Since January, the Farcaster platform has seen a significant jump in user activity following Warpcast’s introduction of Frames — a feature that allows apps to run inside posts without leaving the platform. For instance, Frames enables users to mint nonfungible tokens, perform transactions, access external blog posts and respond to surveys directly within the app.
The update has significantly boosted user engagement. The number of daily active users on the Farcaster network increased from approximately 5,000 on Jan. 28 to over 249,000 on March 30, according to data from Dune Analytics.
Decentralized social media platforms are a new class of networks that leverage blockchain technology to offer users ownership over their data, content and interactions, moving away from the centralized control seen in traditional social media.
These platforms are characterized by features such as censorship resistance and content monetization without intermediaries. Popular names in this sector include Friend.tech, Minds and Mastodon. According to two industry executives, one of the biggest challenges decentralized social media platforms face is user retention.
Magazine: ‘Treat your first NFT purchase like a first date’ — NFT Collector Suzanne
Disclaimer
We strive to uphold the highest ethical standards in all of our reporting and coverage. We StartupNews.fyi want to be transparent with our readers about any potential conflicts of interest that may arise in our work. It’s possible that some of the investors we feature may have connections to other businesses, including competitors or companies we write about. However, we want to assure our readers that this will not have any impact on the integrity or impartiality of our reporting. We are committed to delivering accurate, unbiased news and information to our audience, and we will continue to uphold our ethics and principles in all of our work. Thank you for your trust and support.
