Stellar’s Lightyear Acquires Visa and Citi-Backed Crypto Startup Chain
Interstellar Rises: Stellar Acquires Visa and Citi-Backed Startup
A new acquisition that has already been rumored for some time now and it was recently concretized: the Stellar crypto startup has acquired Chain, a cryptocurrency that has the backing of some huge companies like Visa and Nasdaq during its $40 million USD funding round.
Lightyear.io, which is the startup building the Stellar protocol, has recently decided to acquire Chain in an undisclosed deal which was closed on September 5. According to the deal, both brands will combine into a new company, Interstellar.
Interstellar will be commanded by Adam Ludwin, former CEO of Chain and RRE Ventures. Jed McCaleb, the creator of both Ripple and Stellar protocols, will act as the CTO while Ludwin is the CEO.
The company will retain all of Chain’s employees and, according to Ludwin, Devon Gundry, a co-founder of the company, will continue to act as the Chief Product Officer. However, the 60 employees will now be officially employed by Interstellar.
Deal Terms Undisclosed, But It Was “A Good Deal For Investors”, Ludwin Affirms
According to Ludwin, the investors had a good deal over the transaction. Early estimates pegged the deal as to be valued around $200 million USD. If this is the actual true value, this would be one of the largest acquisitions in this year.
Ludwin has also affirmed that the acquisition should not be necessarily viewed as change in the direction of the company but as something needed for the development of the company. He has affirmed that when you look at the company’s partnerships with Visa and the Citi group, you can see the progress, but the company was still lacking on the blockchain tech side and Stellar solves the issue.
The partnership with Stellar can make the company progress a lot. According to him, Chain got “Stellar envy” when the people at the company understood that the open source project was actually succeeding in creating a platform that could make proper asset issuance. Both companies had similar problems, so it was a good idea to reunite them and use their best characteristics.
Ludwin has affirmed that Interstellar will not have an active role on the market for XLM tokens, though, and Stellar cryptos will continue to be its own thing. Both companies will merge to make better technology but Stellar will continue its rise to the top.
McCaleb first approached Ludwin in early 2018 with the idea of acquiring the company. Both of them knew each other since 2014 and, even though they were not close friends, they were acquaintances. After discussing how to solve mutual problems, though, the duo bonded and established a closer relationship.
After four or five weeks the two decided to solve their problems together and make better tech with each other’s help. Initially, Chain was to be acquired by a company that was related to Stellar but it was acquired by the startup in the end. Part of the acquisition efforts was to retain the same team so that the company would not simply change its view overnight.
Not Ripple Again
Ludwin was quick to differentiate Interstellar from Ripple right from the start. This would be something hard to do as McCaleb was one of the Ripple founders and served as the CTO of the company before he parted ways with Ripple to form Stellar.
According to the ex-CEO of Chain, Interstellar will not seek to work with Swift, which is what Ripple intends to do. Instead, the company will work with token issuance, which is something that Stellar already does very well. Also, the work of Chain will continue with the new company.
Interstellar will use Sequence, a service introduced by Chain last year, which uses the Chain Protocol to create a suite of tools that can enable people to use private blockchain networks. The company will be a convergence of the goals that both companies had before and not a whole new thing.
A New Path For An Old Vision
Ludwin has affirmed that the company would be somewhat like a third version of his original idea, which began in 2014. According to him, Chain was focused on providing products for developers on the Bitcoin network when it was launched.
However, after raising some funds from important companies in 2015, the platform decided to shift its focus to become a company that leverages the blockchain to create new products with it and to create new assets using the technologies of blockchain, P2P transactions and cryptography.
Now, he believes, his company is basically finding a new path for the old vision of the company of continuing to provide quality in blockchain technology and to look for solutions that can help developers.