Former Obama Tech Officer Raises $3.7 Million for Blockchain SaaS Startup

Offchain Labs, a startup co-founded by a former Obama administration official, has raised a $3.7 million in seed funding.

The round was led by Pantera Capital and included participants such as Compound VC. Offchain Labs co-founder Ed Felten, a computer science professor at Princeton University and former deputy U.S. chief technology officer in the Obama White House, told CoinDesk his software-as-a-service startup will focus on "Scaling smart contracts" for enterprise use cases.

Felten said ethereum's scaling situation hasn't improved dramatically since then, which creates an opportunity for companies like Offchain Labs that can apply layered scaling solutions to this evolving infrastructure.

So Offchain is taking an experimental approach to solve this issue.

With at least a half-dozen well-funded startups offering blockchain-related SaaS options, Felten said Offchain's system will differentiate itself by offering the cheapest model.

Similar to BlockApps - a ConsenSys spinout that's currently raising a Series A and graduating clients from proof-of-concept to production - Offchain Labs plans to establish industry-specific blockchain networks where clients choose who operates validators for each network.

For another competing example, Swedish SaaS startup Chromaway raised $11 million in a private token sale late last year with Arrington XRP Capital and Neo Global Capital, according to Chromaway co-founder Or Perelman.

"They'll say, 'Why do I need to put in more capital than I actually need to do my trade?' And so, the main differentiator for Offchain, I think, even though they have a great team and all the usual stuff, is going to be the lower capital requirements."

Krug expects Offchain's alpha release in 2019 to focus on ethereum-oriented gaming apps, with subsequent adjustments based on user feedback.

Offchain co-founders image courtesy of Offchain Labs / Misha Rodionov.