Mysten Labs Rises from the Ashes of Diem Raising $300M in Funding

Mysten Labs, a startup founded by former Meta executives, has raised $300 million in a series B funding round which values the company in excess of $2 billion.

The raise is the second conducted by the company in under a year. In Dec, Mysten Labs raised an initial $36 million in seed funding. That has now been dwarfed in an additional raise led by FTX Ventures, and backed by other industry heavyweights including a16z, Jump Crypto, Apollo, Binance Labs, Franklin Templeton, Coinbase Ventures, Circle Ventures and Lightspeed Venture Partners.

Why Mysten Labs?

Such high levels of investor confidence may be attributed to the team behind the company. Company founders Evan Cheng, Sam Blackshear, Adeniyi Abiodun and George Danezis are all former employees of Meta. All worked on the company’s cryptocurrency wallet, Novi.

Despite the fact that Novi and Diem never got off the ground, the industry perception is that this failure was due to no fault of the engineers who worked on the project. Arianna Simpson, general partner at Andreessen Horowitz (a16z) explained after the initial raise that Meta had “done an amazing job at recruiting top talent over the last few years.” 

When the Novi and Diem dream collapsed, all eyes were on what that top talent would do next. One answer is Mysten Labs. With the corporation raising in excess of $300 million in just under one year, the question now is how that money will be spent.

The Mysten Labs war chest

Mysten Labs is currently working on Sui, a novel blockchain “rich and dynamic on-chain assets” from gaming to finance. Sui was recently named by Messari as one of the projects that could fuel the next crypto bull run.

Sui promises to deliver a far better experience than is currently possible in wWeb3. Evan Cheng, Co-Founder and CEO of Mysten said the industry was currently living in the “dial up era.”

“It’s slow, expensive, capacity constrained, insecure, and simply hard to build for,” he said in a press release. 

With Sui, Cheng and his team are seeking to build a blockchain, “that scales with demand and incentivizes growth, eliminating middlemen, and enabling users across applications to seamlessly integrate and interact with their favorite products.”

According to Cheng the additional budget allows the company to continue to scale Sui and to accelerate its growth.

While $300 million funding may seem to be a big vote of confidence in Sui, it is not the only bet that VC firms have recently made on former Meta employees.

Spread betting and deja vu

Mysten Labs are not the only former Novi team members seeking to build the next big thing in blockchain. Former Novi coworkers Avery Ching and Mo Shaik have since moved on to form Aptos Labs. 

To compound the similarities between the two projects, both Sui and Aptos are powered by Move. Move is an open-source programming language developed by Meta, initially intended to support the abandoned stablecoin project Diem. 

Earlier this year Aptos conducted and found similarly generous investments. In March the company raised $200 million in an investment round which included a16z, Katie Haun and FTX Ventures.

In July, it topped up the piggy bank with a further $150 million raise. Crunchbase confirms that the company has raised $350 million, placing their working capital in the same region as Mysten Labs.

In what may seem a familiar story, Aptos was also recently named by Messari as one of the projects that could power the next crypto bull run. 

FTX spending spree

Sam Bankman-Fried, CEO of FTX, has not been shy to admit the company has money to spend. In July, Bankman-Fried revealed the firm had a casual “few billion” on hand to bail out beleaguered firms struggling through the recent market slowdown.

Crypto winter may have slowed the market, but big investments continue to be made. FTX is among those well positioned to fund upcoming projects, and with a money-mountain in the billions of dollars, plans for the company are nothing short of global dominance.

Besides Aptos Labs and Mysten Labs, investments this year included the IEX Group. In April FTX invested an undisclosed sum in the registered exchange, providing them with greater access to institutional investors.

As Be[In]Crypto reported at that time, Bankman-Fried said, “Ideally, I would want FTX to become the biggest source of financial transactions in the world.”

FTX has strong competition in the pursuit of that goal with Binance and Coinbase making similarly large investments this year. Both companies were also co-investors in Mysten Labs which indicates that FTX may have to share the pie.

Even so, FTX may yet have the competitive edge.

In 2020 Bankman-Fried donated $5 million to Joe Biden’s 2020 support committee. As the company aggressively expands, that relatively small sum may yet still prove to be the smartest FTX investment of all.