The blockchain race is about to get even more crowded: Movement Labs, a San Francisco–based software development team that’s building a layer 2 Ethereum blockchain, has closed a $38 million funding round, Fortune has exclusively learned.
Polychain Capital, the crypto VC mega firm led by Coinbase alum Olaf Carlson-Wee, led the Series A, with participation from other digital-assets-focused investors including Hack VC, dao5, and Robot Ventures.
Movement’s raise comes on the heels of more sizable rounds for other companies building new blockchains, including Monad Labs, which raised $225 million to build a layer 1, and Berachain, another layer 1 developer that recently announced a $100 million Series B.
While the flurry of fundraises reflects a return to crypto-focused venture investments, the concentration of capital around blockchains also indicates an increasingly competitive landscape for companies hoping to build the next Bitcoin or Ethereum.
In an interview with Fortune, Movement cofounders Rushi Manche and Cooper Scanlon said they hope to differentiate Movement by building the first layer 2 blockchain atop Ethereum that utilizes Move, a programming language originally built by Facebook for Diem, its ill-fated stablecoin project.
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“We are delivering Move to the front door of Ethereum, and it’s this ecosystem that we’re serving,” Scanlon said. “A lot of folks who never wanted to leave Ethereum are, for the first time, going to be able to benefit from the security performance of a next-generation virtual machine.”
According to Scanlon and Manche, Movement Labs will soon announce its devnet and aims to launch its mainnet in the late summer or early fall. The company also plans to launch its own token, tentatively named Move.
The Ethereum movement
To outside observers, the proliferation of new blockchains may seem like overkill—a view often shared by those in the industry. The first, Bitcoin, created the concept of cryptocurrency in 2009; the next major advance came in 2015 with the launch of Ethereum, which introduced smart contracts and the ability to build decentralized applications ranging from exchanges to money-lending protocols.
Developers since then have been vexed by blockchains’ speed and cost, with a series of layer 2s built atop Ethereum, as well as new layer 1s such as Solana, promising faster and cheaper transactions. As evidenced by the recent congestion issues plaguing Solana amid its memecoin mania, the problems remain.
Two recently launched blockchains, Aptos and Sui, came with a new value proposition: Each boasted teams of developers from Facebook who helped build the crypto-focused programming language called Move. They also created the Move Virtual Machine, a kind of computer program undergirding a blockchain that would represent a next-generation update to the Ethereum Virtual Machine.
As Manche and Scanlon explained, while Move and its new virtual machine would come with better security and capabilities than EVM, most developers were still building for Ethereum, which had much stronger community backing. Even if Sui and Aptos could boast better performance, they couldn’t necessarily build a thriving new ecosystem.
“Aptos and Sui raised a lot of money,” Manche told Fortune. “But they failed to execute on the community aspect.”
Movement, in contrast, is building its layer 2 on top of Ethereum but while using the Move programming language and the MVM. It’s also building a tool called Move Stack, which will allow the Move Virtual Machine to be adoptable by other blockchain networks outside of Ethereum. Scanlon said they’ve been contacted by “quite a few” different blockchains, including Avalanche and Binance Smart Chain.
Their thesis is that developers will want to build using Move, which they say is more intuitive than other languages, such as Solidity, but still be part of the Ethereum community. “Everyone’s trying to bring Facebook on-chain,” Manche said. “We’re bringing the language that Facebook built to Ethereum.”
