Tel Aviv-based startup Chain Reaction announced on Thursday that it has raised $70 million in funding to support the expansion of its engineering team and accelerate the development of its upcoming blockchain chip. The company plans to release its first chip, Electrum, to the market later this year and aims to begin mass production in the first quarter. The Electrum chip is designed to perform blockchain operations, known as “hashing,” quickly and efficiently, making it suitable for tasks like mining digital currencies such as Bitcoin.
Alon Webman, co-founder and CEO of Chain Reaction, expressed confidence in the company’s ability to gain market share in the blockchain chip segment. He believes that this success will support their larger goal of creating a “fully homomorphic encryption” chip, allowing users to work with encrypted data securely. Webman aims to launch this innovative chip as early as the end of 2024.
The need for enhanced data security is a driving force behind Chain Reaction’s ambitious plans. Webman highlighted that many industries, including defense and government sectors, are hesitant to fully migrate to the cloud due to security concerns. Decrypting data for processing leaves it vulnerable to malicious attacks, such as theft or tampering. The fully homomorphic encryption chip aims to address these concerns by enabling secure data operations and analytics while the data remains encrypted.
With a wealth of experience in chip design, including over 30 previous designs, Webman is no stranger to the industry. He is also a co-founder of Mellanox Technologies Ltd., a data center networking chip company that was acquired by U.S. chip supplier Nvidia Corp for nearly $7 billion in 2020.
The latest funding round was led by Morgan Creek Digital, a venture capital firm specializing in blockchain technology, AI, and digital assets. This round brings the total amount raised by Chain Reaction to $115 million, further validating the company’s potential in the blockchain chip market.
The demand for advanced blockchain technology continues to grow, driven by the increasing adoption of cryptocurrencies and the need for secure and efficient data processing. Chain Reaction’s innovative approach to blockchain chip development positions them as a key player in this evolving landscape.
As Chain Reaction progresses with the production and deployment of the Electrum chip, the company is poised to make a significant impact on the blockchain industry. The support from investors and the expertise of the team set the stage for exciting advancements in data security and encryption technology.
