Lightning Labs raises $10M Series A, launches beta version of its first financial product

Quick Take

  • Lightning Labs, a San Francisco-based Lightning Network development team, has raised a $10 million Series A led by Craft Ventures
  • The firm also announced the beta launch of Lightning Loop, a product that allows users to move funds between the Lightning Network and the bitcoin network
  • Other participants of the rounds include Ribbit Capital, RRE Ventures, Slow Ventures, M13, and several individual investors

Lightning Network development team Lightning Labs has raised a $10 million Series A funding round led by Craft Ventures, with participation from Ribbit Capital, RRE Ventures, Slow Ventures, and others. 

Along with the funding round news, the San Francisco-based startup also announced Wednesday the beta release of Lightning Loop, the firm's first financial product. Over the past year, Lightning Labs focused on developing the Lightning Network implementation software (Lightning Network Daemon) and launched its mobile and desktop apps. Now, the firm is seeking to expand its user base with the Lightning Loop feature. 

“We are building a real business with real customers and real revenue, and we want to solve real problems for real users… We will be using the fund to hire more talent on the development and business side,” Lightning Labs CEO Elizabeth Stark told The Block. 

How does the Lightning Loop work? 

First launched in March 2019 in alpha, Lightning Loop is a non-custodial service that provides the on-and-off ramp for users to move funds between the Lightning Network – the layer 2 scaling solution built on the bitcoin blockchain – and the bitcoin network itself. 

Currently, when users transact with each other through Lightning channels, the maximum amount of bitcoin they can send and receive is predetermined by the number of bitcoin they deposit into the channel when first setting it up. To transfer more than that amount, users have to open up a new channel. 

Through Submarine Swaps, a technique designed by the Lightning Labs to enable atomic on-chain to off0chain swaps, Lightning Loop allows users to move bitcoin out of their Lightning channels onto the bitcoin blockchain to