Ephemera, a US-based startup behind XMTP, a decentralized messaging protocol that enables secure communication between crypto wallets and Web3 apps, has raised US$20 million in a series B funding round.

The round, which closed in August, values the company at US$300 million.

Union Square Ventures led the investment, with co-founder Fred Wilson joining Ephemera’s board.

Other participants included Andreessen Horowitz’s crypto arm, Lightspeed Faction, Coinbase, and actor Ashton Kutcher. The funding involved both equity and token warrants, according to Ephemera CEO Shane Mac.

XMTP aims to provide an alternative to centralized messaging platforms like Signal and WhatsApp.

Ephemera plans to generate revenue by operating servers for the XMTP network and charging developers for message transmissions.

The company is also developing its own messaging app to compete with existing platforms.

🔗 Source: Fortune

🧠 Food for thought

1️⃣ The pendulum swing between centralized and decentralized internet models

The internet has historically oscillated between centralized and decentralized architectures, with Ephemera representing the latest push toward decentralization.

The original internet (ARPANET) was deliberately designed as a decentralized system to withstand failures, but commercial forces led to increasing centralization from the 1990s through the 2010s 1.

By the mid-2000s, major platforms like Facebook and Twitter had accumulated enormous power over user data, raising concerns about privacy and censorship that are fueling today’s decentralization movement 2.

This pattern explains why Ephemera’s $300 million valuation reflects investor belief in a market shift toward decentralized alternatives, as users become increasingly concerned about data ownership and privacy.

The cycle suggests that while centralization offers convenience and network effects, it eventually creates enough privacy and control concerns to spark renewed interest in decentralized models, as we’re seeing with messaging.

2️⃣ Technical tradeoffs between messaging protocols shape adoption barriers