Stellar (XLM) Looks To Buy Chain Blockchain Startup for $500 Million in Lumens
Cryptocurrency startup Stellar is exploring the possibility of acquiring Chain, the San Francisco-based blockchain technology company, according to a report from Fortune.
The price of the acquisition is expected to be $500 million in Stellar’s digital currency, Stellar Lumens (XLM).
Chain has previously raised more than $43 million in venture funding from investors like Pantera Capital, Nasdaq, RRE Ventures, Blockchain Capital, Citi Ventures, and Khosla Ventures. These backers are expected to receive payment in the form of Lumens. They can choose to hold their XLM or sell the tokens immediately after the transaction, according to the report from Fortune.
Stellar first launched its Lumens currency in 2014. The company was founded by Ripple co-founder Jed McCaleb. Today, XLM has grown to become a top 10 cryptocurrency by market cap. As of today, it sits in the number 7 position with a market cap of over $4.3 billion. The cryptocurrency made headlines this past week after being approved by New York financial regulators for trading on the itBit exchange.
Stellar’s adoption has grown across the industry – including by both crypto companies and companies outside the space. Stellar has received funding from Stripe, for example, and they’ve used that funding to form partnerships with messaging startups like Kik and tech giants like IBM. IBM is using Lumens to send payments between countries in the South Pacific.
Why is Stellar seeking to acquire Chain? Well, as reported by Fortune,
“the pairing makes sense” because “Stellar has the money, and Chain has the engineering talent.”
“One source familiar with the deal said it is likely in response to the heated battle for top developers between crypto companies.”
We’ve previously seen stories claiming blockchain developers are earning salaries of $500,000 per year, on average, as the demand for blockchain technology significantly outstrips the supply. With top companies struggling to acquire top talent, costly acquisitions are one way to avoid the issue.
Stellar would acquire Chain’s engineering talent through the deal. However, it’s unclear how Stellar would incorporate Chain into its ecosystem otherwise. It’s also unclear whether Chain will continue building its existing products or if Chain CEO Adam Ludwin would stick around.
Stay tuned for more information about Stellar’s acquisition of Chain. Right now, Fortune is citing “people familiar with the deal” by claiming that Stellar “is in talks”. The acquisition has not yet been completed.