Hardware wallet maker Ledger has completed a $380 million series C funding round, the third largest in crypto and blockchain history. Physical hardware wallets, unlike smartphone applications, are dedicated devices used to store digital assets. Ledger has sold more than 3 million hardware wallets in 190 countries to date, and it has more than 1.5 million monthly users on Ledger Live, a mobile companion to the Ledger hardware wallet which allows users to manage and store their assets.
The round gives Ledger a $1.5 billion valuation, making it the latest crypto unicorn. It was led by 10T Holdings, with Cathay Innovation, Draper Esprit, Draper Associates, Draper Dragon, DCG, among others. Ledger previously raised $8.3 million in a Series A round in March 2017 and $75 million in a Series B round in January 2018.
The Ledger team plans to use the funds to launch a new services platform that will act as a dashboard where Ledger users can access hundreds of new decentralized products and applications from cryptocurrencies, to non-fungible token (NFT) and decentralized finance (DeFi) protocols. Ledger has integrated with platforms like Coinify, a crypto payments and exchange platform; Changelly, a crypto exchange; and Compound, a decentralized crypto borrowing and lending platform.
“What we stand for at Ledger is security first and foremost but also usability. This is a way of saying that whatever you do with your crypto should be in a secure environment,” CEO of Ledger, Pascal Gauthier, told Forbes. “Ledger is providing you with this experience where you can hold your bitcoin or you can trade your bitcoin always with some level of security.”
Despite this progress Ledger still faces the challenge of convincing users to forgo software applications on mobile devices, which are far more popular, for their dedicated hardware. However, Gauthier believes this will quickly change as Ledger continues to evolve their product. Ledger also offers educational materials arguing that hardware wallets, while less convenient, are a necessary security measure, according to Ledger’s team of product-testing hackers, internally referred to as ‘The Dungeon.’
“If you ask the Dungeon, there is no such thing as software-only security. When you hold your keys the only viable security is with secure hardware,” Gauthier said. “You have to sometimes sacrifice a little bit of usability to be really secure because if you lose those keys this is the end game, you lose the value.”
Gauthier also says that within the next 9 to 18 months Ledger will release its next generation of products that will be almost as easy to use as software wallets.
However, Ledger will have to build trust back up in the market after a hack of its marketing database last year leaked customer data resulting in mass phishing emails. Since then, Gauthier says Ledger has updated their policies to ensure their partners erase customer data and minimize the amount of time Ledger holds on to that information.
“The security of the product was untouched, but the security of the company overall is something that you can always work on and always invest money into, so we’re investing a lot of money into making Ledger a much more secure value proposition overall,” Gauthier said.
When asked about competition, Gauthier doesn’t believe there is another company in the crypto space offering the exact same services as Ledger. However, some are getting close. This week, Square SQ CEO Jack Dorsey tweeted that his company is planning to develop a hardware wallet, a follow-up to the sizable bitcoin position Square has built up over recent months and its growing bitcoin brokerage business. Of course, Gauthier doesn’t plan on giving up Ledger’s position as the #1 hardware wallet company.
“For us, that’s super exciting because this feels like direct competition, but it also tells us that this market is about to become really big and right now we’re number 1 and so when Jack says he’s entering the market I’m like, cool, game is on.”
Source: Forbes Crypto