According to the Financial Times, Ethereum blockchain tools and consultancy firm ConsenSys is in talks to raise funds at a $3 billion valuation, citing un-named sources. In April, it raised $65 million from JP Morgan, Mastercard, UBS and several other blockchain firms.
That’s not a huge surprise as several blockchain companies have recently concluded deals at multibillion valuations, including Bitcoin development house Blockstream, which raised $210 million at a $3.2 billion valuation. Although the business models of the two are vastly different.
ConsenSys has two major divisions, one focusing on high profile cryptocurrency tools such as the MetaMask wallet; Codefi for digital assets, payments and staking; and Infura for infrastructure. It also consults enterprises that run private permissioned blockchains.
In the early days, ConsenSys focused purely on the cryptocurrency sector, both developing tools in-house and funding numerous investments. But as crypto winter took hold in 2018, it faced an uncertain future given it was reliant on founder Joe Lubin’s funding as the very first Ethereum investor. He laid off staff, and double down on providing consulting to enterprise clients, including big banks, the world’s largest agribusinesses, fashion houses like LVMH and others.
In 2019 rumors circulated that ConsenSys was seeking a $200 million funding, but the word on the street was it was looking for too high a valuation of $1 billion and was too much of a conglomerate. Hence in early 2020, before the pandemic, it laid off more staff and split off ConsenSys Investments. Thus it was focused on its core tools and consulting. Then Covid-19 took hold and it shed more staff last April.
Its fortunes turned in the middle of 2020, highlighted by a deal with JP Morgan in August. The bank transferred responsibility for its Quorum enterprise blockchain platform to ConsenSys and invested in the firm.
This was shortly after that the DeFi boom started, followed by a general cryptocurrency boom and the latest non-fungible token (NFT) frenzy. ConsenSys had a hand in it all. While enterprise consulting helped ConsenSys through crypto winter, right now, the company is booming on all fronts. But two areas stand out.
One is its Metamask wallet, the most popular wallet for those who want to self custody cryptocurrencies. When ConsenSys announced its April funding round, it had three million downloads and $2 billion in transactions that used the wallet for token swaps. Those figures are now ten million downloads and $9 billion in token swap transactions on which it earns a 0.875% fee, yielding $79 million in revenue since October 2020, the vast majority since May 2021.
Using it for token swaps is an optional feature currently used by 7,000 – 10,000 people daily. And now ConsenSys has launched an institutional version of its wallet.
The second stand-out area is on the consulting side, where ConsenSys is involved in numerous central bank digital currency projects (CBDC), including Korea (indirectly), Thailand, Hong Kong, France, and Australia.