Lightning Labs CEO and co-founder Elizabeth Stark revealed today that the financial software company had raised $10 million in Series A funding to level up its payments system and expand its developer network, which already stands at more than 4,000. She also said Lightning Loop, a paid product for managing liquidity on the network, had moved into beta.
The Lightning Network is an application layer on top of Bitcoin that allows people to make and receive payments quickly and cheaply off-chain. Lightning Labs is a software company dedicated to building on that network. It was founded by Stark and current CTO Laolu Osuntokun in 2016.
The lead financier in the Series A round was Craft Ventures. The full list of investors is quite long, with M13, Ribbit Capital, RRE Ventures, and Slow Ventures at the forefront. The founders of Pfeffer Capital, Stone Ridge, and First Round Capital also chipped in.
Lightning Labs previously secured $2.5 million in seed funding from notables such as Litecoin's Charlie Lee and Twitter's Jack Dorsey. Craft co-founders Bill Lee and David Sacks joined as well. This round will more firmly entrench Craft's involvement; managing director Brian Murray will join Lightning's board.
Sam Lessin of Slow Ventures, indicated why it was ready to do business: "Lots of people talk about the 'internet of money' as an opportunity, but few teams have any sort of concrete plan around how to get there like Lightning Labs."
Lessin et al should be happy, though not surprised, to see today's beta release. The addition of Loop to Lightning Lab's product line, which already includes its LND platform, gives the company a product it can charge money for. Startups like Fold have built their applications on top of Lightning Labs' platform. Loop may help them speed up their operations.
Loop is split into two functions: Loop In and Loop Out. The former helps people move currency from the Bitcoin network off-chain so they can make payments on the Lightning Network. Loop Out allows the people and businesses who receive such funds to get them quickly into on-chain accounts at exchanges or other spots. In short, it's a liquidity system so that people have enough money in their accounts.
In the release, Stark teased that Loop "is the first of several 'blue sky' Lightning products" the company is building. We'll see what it can cook up before a Series B.