Interstellar Arrives: Visa, Citi-Backed Chain Acquired By Stellar Startup

Announced Monday, Chain, which raised more than $40 million from financial institutions including Visa and Nasdaq, in the process helping define the narrative for business interest in the technology through its partnerships and stage appearances, has been acquired in an undisclosed deal by Lightyear.io, a startup building on the Stellar protocol.

Closed officially September 5, the deal will find both brands combining to form a new entity called Interstellar to be helmed by former RRE Ventures partner and Chain CEO Adam Ludwin, who will serve as Interstellar's CEO, and Jed McCaleb, the creator of the XRP and Stellar protocols, who will be acting CTO. The combined company will retain "100 percent" of Chain's employees, according to Ludwin, including co-founder Devon Gundry, who will remain on as chief product officer.

Ludwin went so far as to suggest that the acquisition by Lightyear shouldn't be viewed as a change in direction, even though Chain's work focused largely on private blockchains.

In Ludwin's words, Chain got "Stellar envy," when it realized the open-source project was succeeding on its goal of creating a platform that could excel at asset issuance, albeit largely with startups.

That said, also notable is that Ludwin said Interstellar does not intend to play an active role in the market for the Stellar cryptocurrency, XLM, saying that Interstellar is a "Software" play.

At the time, details about a potential sale began to emerge, with CoinDesk first learning that Chain was in discussions to be acquired by a company affiliated with Stellar in May. Ludwin confirmed that the two companies examined multiple ways to structure the deal, which added to the length of the acquisition talks, as did efforts to retain existing employees.

Elsewhere, Ludwin sought to distance Interstellar from comparisons to one McCaleb's early efforts, San Francisco-based Ripple, a company for which McCaleb served as founder and CTO before the relationship devolved into high-profile legal battles.

For one, Ludwin said that Interstellar would seek to work with the Stellar Development Foundation to grow the software in concert with other for-profit startups.

Still, like Ripple, Ludwin said the new company will continue to work to bring open-source software to the firms with which Chain already had established projects.

Still, Ludwin said the goal at all times as been the pursuit of technology that would enable a platform for the creation of new assets, ones that, like bitcoins on the bitcoin blockchain, would be defined by cryptography and peer-to-peer networking.