Polychain Capital leads bitcoin wallet developer Foundation’s $7 million raise

Foundation has raised $7 million to develop bitcoin-centric tools which enable what they call "digital sovereignty."

The seed round was led by Polychain Capital. Other backers include Greenfield Capital, Lightning Ventures, Warburg Serres and Bolt, according to a company release. 

The Boston-based startup, which was founded in 2020, develops tools to make bitcoin more accessible. Its flagship product is a bitcoin hardware wallet called Passport and it has also developed a mobile app that contains a bitcoin software wallet, called Envoy. 

Weathering the bear market

The startup closed the fundraise in December as a pure equity round Zach Herbert, co-founder and CEO of Foundation, said in a statement to The Block. 

“The current environment certainly made things more difficult, but I think we were buoyed by our clear vision of sovereignty and self-custody,” Herbert said. “In the wake of FTX, it's more important than ever that we empower individuals with the ability to store their own keys. The current generation of wallets have served early adopters, but the majority of funds still remain on centralized exchanges.” 

The funds from the raise will be used to continue building products with a short-term focus on software services, according to the release. The funding will also be used for expanding the design and engineering teams. 

“The rave reviews that Foundation’s Passport has garnered already is indicative of the demand for sovereignty and freedom in this new era,” said Tyler Mincey, Foundation board member and partner at Bolt, in the release. “This is a giant step in the right direction, both for self-custody and digital sovereignty, which is one of the many reasons we are excited to continue supporting the Foundation team through this fundraise.” 

Foundation previously raised $2.5 million in a pre-seed round led by Bolt in July last year. 

The rise of hardware wallets

Hardware wallets are in focus following the collapse of crypto exchange FTX, where many users lost their assets after allowing the exchange to take custody of them. Hardware wallets mean users can self-custody their assets offline in a secure manner. 

Pascal Gauthier, the CEO of Ledger which is one of the top hardware wallet manufacturers, told The Block that the FTX catastrophe has spurred the best sales month to date for its devices, which almost doubled its previous record. He said that last month’s sales were in the “few hundred thousand” range. Ledger also recently debuted a new device designed by iPod inventor Tony Fadell.

Likewise, a spokesperson from hardware wallet developer Trezor told The Block that demand for its products jumped by more than 300% in mid-November following the FTX collapse.