Sequoia backs enterprise blockchain developer Nervos in $28m round

Photo credit: Nervos Network

Chinese blockchain company Nervos Network has bagged US$28 million in a funding round led by Sequoia China and Polychain Capital, with Multicoin Capital and FBG Capital among others to join in.

The company will use the funds to hire more product and engineering staff and to speed up the development of its blockchain. Some capital will also go toward strategic partnerships with other companies.

The Nervos blockchain is an open network designed for enterprises, on which they can build and deploy decentralized applications (Dapps).

Nervos is led by four co-founders who are developers with notable backgrounds.

Jan Xie, chief architect of Nervos, was a former researcher and developer with the Ethereum Foundation. Nervos CEO Terry Tai was previously the core developer at the now-defunct, once-popular Yunbi cryptocurrency exchange, which shut after a crackdown by Chinese regulators last year. The two other co-founders are Daniel Lu, former CTO at crypto-wallet imToken, and Kevin Wang, a former software engineer at IBM.

Filling a gap

Blockchain-based businesses typically use more than one blockchain protocol. A blockchain protocol can be looked at like an ecommerce marketplace, and blockchain-based businesses are like the merchants selling their wares on that marketplace.

Such businesses transact money using a public blockchain protocol like Ethereum due to its security aspects, and handle daily operations on a private permission-based chain such as Hyperledger Fabric. Public blockchains are secure because there is no central authority managing the chain, which makes it difficult for hackers to hack into the system as there’s no single source they can target on.

An example is trade finance platform Kommerce. Its business operations – transactions, orders, and verification of goods – runs on Hyperledger Fabric while the sending and receipt of money runs on Ethereum.

Nervos says its protocol is more convenient for enterprises as they’ll only need to deal with one blockchain for all business activities.

The group’s proposed network uses an “innovative layered architectural” design which will consist of a public chain and a high-performance application layer, combining functions of both a public and a permissions-based blockchain.