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Sequoia Capital & BlueYard Invest in Privy: Data Security for Web3
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Sequoia Capital & BlueYard Invest in Privy: Data Security for Web3 

Data startup Privy announced an $8.3 million seed funding round on Wednesday co-led by Sequoia Capital and BlueYard Capital. The company hopes to bridge the gap between a smooth user experience and the importance of secure data and user consent. This seed funding round will fuel Privy’s developer tools aimed at securely collecting data to improve the crypto user experience. 

 

Sequoia Capital & BlueYard Invest in Privy: Data Security for Web3

 

Developers may utilize Privy’s application programming interfaces (APIs) to manage and integrate user data. To allow developers to SMS or email consumers without directly touching their personal information, the encrypted data is discreetly connected with on-chain addresses. 

 

Projects that require financial and compliance data, which is a typical requirement in decentralized finance (DeFi), may use that sensitive data without storing it locally. Privy knows the idea of collecting any data can be a hard sell in certain areas of crypto. 

Henri Stern, Co-founder of Privy stated, 

 

“My stance on privacy is that privacy isn’t about no data being shared. Privacy is about control over that data. It’s about being able to revoke when you choose to and really putting that control in the hands of the users.”

 

Stern also stated,

 

“Our fear is that developers start just dumping user data into databases and the promise of Web 3 as a sort of sovereign space for user data, where user control is paramount, goes away. So we’re excited to get in the hands of developers as quickly as we can.”

 

Stern added,

 

“Privy has seen a lot of activity in the spaces of DeFi, decentralized autonomous organizations (DAO), and what we would call Web2 serving Web3, which includes hardware, wallet providers, crypto exchanges, and on- and off-ramps. In other words, areas where compliance and communication are key.”

 

Funding Details

 

Sequoia Capital, which just announced a new $600 million crypto startup fund, joined in this deal, with partners Shaun Maguire and Josephine Chen managing the investment. Maguire emphasized Privy’s “privacy-obsessed” founders’ qualifications.

 

Privy’s Stern formerly worked as a research scientist at Protocol Labs, an open-source research and development facility founded by BlueYard Capital. Li worked as a software developer at Aurora, a self-driving technology firm.

 

Stern added, 

 

“We try to reject the zealotry on both sides. The data buffet of Web 2 is absolutely horrendous. Building transparent infrastructure that allows for there to be a nuanced conversation around it is, I think, the only way out. It’s an uncomfortable answer because there is no silver bullet in privacy.”

 

Crypto has a problem with its user interface. Investors find their investment has been liquidated on Twitter since there is no email address associated with their on-chain account to give out a message. A user with several non-fungible token (NFT) wallets must sign in to each wallet separately instead of having a single global login.

 

Chen from Sequoia Capital stated, 

 

“We’ve seen the speed at which they execute, it’s been very few months since we first invested. They have a live product and are iterating with customers who love them. I think we’re talking about the first basic step, ‘How do we make a Web3 experience that’s just slightly more personal and slightly better for users overall’”

 

Collecting user data is part of the solution, which some crypto natives are anxious about because Web2 data collection has gone about as smoothly as the Titanic’s first voyage, with a similar amount of breaches.

 

Electric Capital, Archetype, BoxGroup, and Protocol Labs were among the other investors in the round. Privy intends to utilize the funds to expand its staff, notably in engineering and research, and to continue developing use cases that match client requirements.

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