Crypto’s big promise is decentralization: decentralized money, decentralized cloud computing and, in the case of one startup, decentralized messaging. Ephemera and its founders, who are developers behind the protocol XMTP, say they’ve found a niche in building a decentralized network that they one day hope will challenge messaging apps like Signal and WhatsApp.
On Wednesday, Ephemera announced it has raised $20 million in a Series B funding round that values the startup at $300 million. Influential tech investor Union Square Ventures co-led the fundraise, and its cofounder Fred Wilson joined Ephemera’s board.
The crypto arm of Andreessen Horowitz and Lightspeed Faction also co-led the raise. The crypto exchange Coinbase, Sound Ventures, and the actor Ashton Kutcher participated.
The raise, which closed in August, was for equity and token warrants, or promised allocations of yet-to-be-launched cryptocurrency, Ephemera cofounder and CEO Shane Mac told Fortune. He added that they plan to launch a cryptocurrency but didn’t specify when.
“At the core,” he said of XMTP, “it’s just a more open protocol that allows you to prove it’s private and secure, not trust Facebook and Signal to tell you their server is secure.”
Decentralized messaging
Popular messaging apps like Signal or WhatsApp are too centralized, argues Mac. The most secure of those apps, especially Signal, do offer what’s called end-to-end encryption, or cryptography that permits only the sender and receiver to legibly read a message. This prevents big corporations like Meta, which owns WhatsApp, from snooping on its users.
But users don’t own their messages and can’t port their conversations off platform. So, if someone wants to switch from, say, Signal to WhatsApp, they won’t see their messages with their friends or colleagues from the prior app appear in the new messaging app.
That’s where XMTP comes into play. A messaging app built on top of the protocol is able to port in prior chats from other messaging apps that use the protocol. Plus, Mac, the CEO of Ephemera, says that an open network that any researcher or developer can stress test is more secure. “We fundamentally believe that the most private network is the one where nothing is hidden,” he said.
XMTP isn’t the only decentralized messaging protocol on the market. There’s another called Matrix, and even Jack Dorsey, the cofounder of X (formerly Twitter) and a noted Bitcoin bull, has experimented with his own crypto messaging app called Bitchat.
But Mac, the CEO of Ephemera, says XMTP is the most popular protocol among crypto companies. The crypto wallet MetaMask and the crypto domain provider Unstoppable Domains have both been building on top of the network, which is currently in beta. And Coinbase just released a revamped version of its crypto wallet, which integrates XMTP, said Mac.
His company plans to make money from operating some of the servers supporting the XMTP network. (Developers have to pay a fee every time they send a message.) He also plans to launch his own messaging app to rival Signal.
Correction, July 17, 2025: Union Square Ventures, a16z, and Lightspeed all co-led the fundraise, not just USV.
