Flashbots Seeks to Raise $50M at $1B Valuation: Report

Lead MEV organization Flashbots is conducting a reverse-pitching process to raise between $30 million and $50 million. The company has recently come under fire for its role in censoring Ethereum transactions.

$1 Billion Valuation

Flashbots is changing its business model.

According to a report from The Block, crypto’s leading MEV organization is looking to raise between $30 million and $50 million at a $1 billion valuation. 

Interestingly, Flashbots is reportedly conducting a reverse-pitching process: instead of pitching prospective investors, the organization is inviting investors to make their own pitches—meaning that they need to convince the company to accept their funds. Crypto investment fund Paradigm is reportedly leading the investment round; the firm was Flashbots’ lead investor in its seed-stage fundraise in 2020.

MEV stands for “Maximal Extractable Value.” The term refers to arbitraging on-chain trading opportunities by reordering transactions within a block while it is being produced. Flashbots provides an off-chain block-building marketplace for on-chain traders and validators, with the stated aim of streamlining MEV and mitigating its negative impacts on users. According to Flashbots data, MEV has extracted more than $687 million from blockchain users since January 2020. 

Flashbots, which has marketed itself as an Ethereum public good in the past, has recently come under controversy over its willingness to censor Tornado Cash-related transactions on Ethereum in order to comply with OFAC sanctions. According to MEV Watch, at the time of writing 66% of Ethereum blocks are being produced by MEV-Boost relays that have expressed their intention of censoring such transactions; Flashbots is responsible for producing over 65% of these censorious blocks. In a sense, the organization’s fundraising efforts mean that investors may be financially rewarded for censoring Ethereum transactions.

Disclaimer: At the time of writing, the author of this piece owned BTC, ETH, and several other crypto assets.