Solana-based multisig protocol Squads raises $5.7 million from Multicoin, Placeholder and others

Squads Labs, the main developer of Solana-based multisig protocol Squads, has raised $5.7 million in a strategic funding round.

The round was led by Placeholder VC, with participation from Multicoin Capital, Solana Ventures, Jump Crypto and others, Squads Labs said Monday. Angel investors including Anatoly Yakovenko, co-founder of Solana Labs; Lucas Bruder, CEO of Jito Labs; and Mert Mumtaz, CEO of Helius Labs, also backed the round.

This was an equity with token warrants round, Stepan Simkin, co-founder of Squads Labs, told The Block. He declined to comment on valuation.

Squads began raising for the strategic round in April of this year and closed it in July, Simkin said. The round brings the firm's total funding to date to $12.5 million, following a $5 million round last year and a $1.5 million round in 2021.

What is Squads protocol?

Squads is a multisig protocol that helps crypto firms secure and manage their digital assets on-chain. Squads can be seen as a competitor to custody firms such as Fireblocks and Copper, but Squads' biggest competitive edge is its smart contract wallet system, which, as opposed to multi-party computation, exists fully on-chain and is fully transparent and immutable, Simkin said. Squads' sole focus on Solana also helps, according to Simkin, who noted that other firms try to cover all blockchains simultaneously, which can lead to compatibility and user experience issues.

Squads Labs also offers a web app comprising SquadsX and Squads Pro products. Squads web app is built on top of Squads protocol that helps crypto firms manage their developer and treasury assets via multisig. SquadsX, on the other hand, is a browser extension wallet that acts as a companion tool for the app. Squads Pro is a paid subscription that costs $399 per month and offers more features.

Squads iOS product

Since launching in 2021, Squads said it has helped secure over $500 million in assets for over 100 clients, including Helium, Jito, Pyth and Tensor. Now, with fresh funding in hand, Squads plans to grow further by enhancing its offering and launching its retail-facing iOS product later this year, Simkin said.

"The entire Solana ecosystem learned key lessons about the risks of centralization in FTX's collapse, and a silver lining of that collapse was it pushed many teams deeper into the decentralization frontier," Chris Burniske, partner at Placeholder VC, said in a statement. "There's little reason to accept centralized counterparty custody risk when you have a tool like Squads at your disposal."

There are currently 11 people working for Squads Labs, and Simkin plans to keep the team lean in the near future.