The Ethereum blockchain scaling solution Polygon today said it has raised $450 million in new funding led by Sequoia Capital India, which the company intends to use to expand its services and web3 capabilities.

More than 40 venture capital funds also participated in the private funding round, including SoftBank Vision Fund 2, Tiger Global, Galaxy Digital, Steadview Capital, Animoca Brands, Dragonfly Capital and Republic Capital. The round brings the company’s valuation to $2 billion, a spokesperson told CNBC, though TechCrunch reported the valuation at $13 billion, in a possible reference to the collective value of Polygon’s MATIC tokens.

Web3 refers to the decentralized web, which uses blockchain technology to create peer-to-peer networks and token economies where financial transactions can be executed without the need for middlemen. Blockchain networks underlie cryptocurrencies such as bitcoin and Ethereum.

“Web3 builds on the early internet’s open-source ideals, enabling users to create value, control the network and reap the rewards,” Polygon co-founder Sandeep Nailwal said in a statement. “Ethereum, scaled by Polygon, will be the bedrock of this next stage in the web’s evolution.”

Polygon provides what is known as a Layer-2 scaling solution for the Ethereum network, which sits atop the Ethereum blockchain and allows transactions to execute faster and with far lower fees.

Ethereum is the second-largest blockchain and its popularity has led to increased congestion on the network. That has brought extremely slow transactions and very high fees.

Although Ethereum provides a cryptocurrency, much like bitcoin, much of its popularity comes from its use for applications that provide decentralized finance services, gaming and nonfungible tokens. NFTs are blockchain assets that can represent virtual items such as digital artwork, video game items and virtual memorabilia. According to the most recent metric, the NFT market swelled to a massive $41 billion during 2021, up from $100 million in 2020, thanks to NFTs’ exploding popularity.

Using this funding, Polygon will build on its current scaling solutions Polygon Proof of Stake, Polygon Edge and Polygon Avail. Many of Polygon’s scaling products use so-called zero-knowledge rollup technology that allows multiple transactions to be taken off the blockchain and “rolled” into a single transaction. The company intends to invest further in projects that take advantage of this technology and use it to advance scaling further.

Polygon also plans to allocate $100 million of the funds to what it calls an “ecosystem fund” that will support the development of new web3 projects on its network.

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