Following Ledger's announcement of a partnership with iPod creator Tony Fadell to create its latest hardware wallet, rival hardware wallet startup Foundation Devices announced it has raised $7 million to double down on its "sovereign computing platform" allowing users to "take back their digital sovereignty."
The flagship Passport costs $260 and looks like a fancy Vertu phone from the mid-2000s, but it's actually a cryptocurrency wallet designed with security and mobile in mind.
“The entire cryptocurrency space is based on open source. It only works because it's open. We believe that open source software should run on open source hardware. Zach Herbert, CEO of Stock Devices
The company is taking a new approach to hardware wallets, opening up the hardware and software for every device it launches. Yes, that means you can go to GitHub and check every line of code, every component, every mechanical design, and every specification — every design aspect of every one of your products — if you want. The company says open source is central to its mission and vision.
The $7 million fund round was led by Polychain Capital (which is currently flying the flag of crypto winter because despite having over $600 million under management, the fund spent about $9 on your website design) .
Other participants in the round included new investors Greenfield Capital and Lightning Ventures, as well as a number of additional investments from existing investors including Third Prime, Warburg Serres, Unpopular Ventures and Bolt. The investment was made in a SAFE promissory note with an estimated maximum value of $35 million. ( Disclosure: Hadje worked at Bolt as a non-investment portfolio manager and was an early investor in Foundation Devices. The Bolt Foundation investment was made after Hadje left the venture capital firm.)
The company claims to have sold "thousands" of the original Passport and launched a second version of its flagship in March this year. TechCrunch caught up with founder and CEO Zach Herbert at the Baukunst Creative Technologist conference earlier this year, where he detailed his new vision for the future of cryptocurrency. (Not your computer, not your keys are available on YouTube.)
“[FTX's collapse] is a wake-up call about the importance of self-regulation. It is now quite clear that keeping your coins on an exchange is extremely risky. "This is a red flag in terms of corruption, and the regulators don't do it. really protect you by giving. And then it's a red flag for the media. The coverage of FTX in the mainstream media has been terrible,” Herbert told Baukunst's Tyler Mincey, who is also a member of the Foundation's board of directors. but the New York Times, the Washington Post, these very respectable publications, I don't know how you can read their posts. You can find better, less biased coverage on Twitter. And people understand it. But unfortunately, many people lost their savings.
The foundation was established in April 2020 with the goal of creating open source hardware and software products that provide users with "transparent end-to-end sovereignty". The company's primary focus is on safety, which drives a number of important decisions, including manufacturing products in the United States. The founder of the company has little patience and faith in outsourcing.
“The United States has a geopolitical imperative and a security imperative. I think we're moving towards a multipolar world and it's only going to get crazier. Personally, I would never trust a Chinese Bitcoin aggregator," said Herbert. "And I want to be myself in the factory field. We manufacture in New England and I live in the Boston area. I visit the factory at least every two weeks."
One thing is for sure: the company's devices are definitely very different from many hardware crypto wallets. This was no accident.
"Our goal is to call it Digital Deco , inspired by the visual language of Art Deco. We use color and decorative design. The cryptocurrency industry has focused on dark colors for a reason,” explained Herbert. “I think it's completely wrong for our industry. I think it should be about futuristic optimism. Bitcoin must confront a dystopian future, and our design must reflect that.”
The company is aggressively fighting cryptocurrency exchanges: "We're committed to helping users get their bitcoins out of exchanges and playing an important role in achieving digital sovereignty," Herbert told TechCrunch.
TechCrunch interviewed Herbert to learn more about the company, its hopes, dreams and ambitions. We discuss the funding cycle, the need for open source, why self-policing is difficult but necessary for cryptocurrencies, and more. we talked about. The interview has been edited for length and clarity.
© Contributing to TechCrunch Zach Herbert, CEO of the FoundationZach Herbert, Foundation CEO. Image credit : Foundation
What makes you the perfect person to lead this business?
I am a mechanical engineer and a computer scientist since childhood. I discovered Bitcoin in 2013 and it quickly became an all-consuming passion. At first I was interested in the investment potential of the thesis that Bitcoin is the perfect form of money, that its limited supply means that as demand increases, so will the value of Bitcoin. Bitcoin culture has changed the way I see things. As I endlessly consumed Bitcoin-related content, I began to understand the importance of sound money, sovereignty, privacy, and the need to separate money and the state.
In 2017, I left Harvard Business School's MBA program to join a Boston-based cryptocurrency company, first as COO and later as COO. We have built hardware and software including ASIC cryptocurrency mining rigs. I couldn't help but think about the stagnation of self-service tools, especially hardware wallets. So some of my teammates and I launched Foundation Devices in April 2020.
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Personally, I feel like there are two conflicting personalities. First, a technology leader, a startup founder, an engineering graduate and almost an MBA. This is my inherited professional identity. But increasingly, my true self is a bitcoiner, a sovereign self. These conflicting identities are probably the reason for the success of the Foundation so far, why we have always been able to raise venture capital funds for ideas that are considered extraordinary, and why I am confident that we will continue to grow and produce. it's amazing. results. sovereign computing products on the market.
How does this fundraising open up the next steps for the company?
Today, self-care is simply too difficult for most people; so many people have been affected by FTX, BlockFi, Celsius and others crash this year. In particular, we believe that self-control alone is not enough: true sovereignty requires privacy. That's why we set ourselves apart by integrating expert-level privacy features into our products and making them accessible to everyday users. For example, Envoy connects to the Tor network by default, ensuring that we cannot see users' IP addresses or learn anything about their balance or identity.
Fund Raises $7M to Bring 'Sovereignty' Back to Chaotic Crypto World By Hyge Jan Kamps, first published on TechCrunch.