Tel Aviv-based blockchain chip startup Chain Reaction on Thursday said it raised $70 million which will be used to expand its engineering team as it develops its next chip and rolls out its first one to the market this year.
Alon Webman, co-founder and CEO of Chain Reaction, told Reuters that the company will start mass producing its blockchain chip Electrum in the first quarter this year. He said the chip is designed to carry out blockchain operations called "hashing" very fast and power efficiently and also can be used for mining digital currencies like bitcoin.
Webman said he was confident the company could gain market share in the blockchain chip segment which he expects will support its more ambitious goal of creating a so-called "fully homomorphic encryption" chip that allows users to work on data while it's encrypted.
He aims to launch that chip as early as end-2024.
He said many industries such as defence and governments can't completely move to the cloud due to security issues. "Today if you have data (which) is encrypted into the cloud and in order to do any data operation or data analytics, do A.I., you have to decrypt the data," said Webman. "The moment the data is decrypted, it can be attacked by a malicious user to read it, to steal it, or even to change it."
Webman said he has been involved in designing over 30 chips. He is the co-founder of Mellanox Technologies Ltd., a datacenter networking chip company that U.S. chip supplier Nvidia Corp bought 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, and brings the total raised to $115 million.