Ephemera Raises $20 Million in Series B Funding for XMTP Protocol

Ephemera, the core developer behind the decentralized messaging protocol XMTP, has successfully raised $20 million in Series B funding. This round was co-led by Union Square Ventures, a16z crypto, and Lightspeed Faction, with additional participation from Coinbase Ventures, Offline Ventures, Sound Ventures, and Distributed Global. The funding round, which began in the fall of 2024 and closed shortly after, brings Ephemera's total funding to $49.9 million, including a prior $9.9 million seed round and a $20 million Series A round in 2021. The Series B round values Ephemera at a $300 million post-money equity valuation and a $750 million network valuation for the broader XMTP protocol, which will include a token.

The decision to raise funds was driven by a long-term strategic vision and a desire to avoid short-term decision-making in a highly speculative market, according to Ephemera's co-founder and CEO Shane Mac. Despite having significant runway from the previous funding, the company chose to secure additional capital to support its growth and ecosystem development. The round was structured as equity with token warrants, reflecting the broader value of the XMTP protocol ecosystem, including its decentralized infrastructure and community.

As part of the investment, Union Square Ventures managing partner Fred Wilson has joined Ephemera's board of directors, becoming its first outside board member. Wilson highlighted the transformative potential of XMTP, stating that it is rebuilding messaging from first principles, offering secure, decentralized, identity-native, and open-for-developers infrastructure. This protocol layer is poised to support the next generation of messaging applications.

XMTP, which allows secure, end-to-end encrypted messaging between identities starting with wallet addresses, is designed to plug into web and mobile applications. It offers "Signal-grade" encryption, passkey authentication, and native transaction capabilities. The public testnet with independent node operators has been live since February of this year, with the mainnet launch slated for later this year. XMTP is being relaunched inside Coinbase's new Base app, marking a strategic shift from an opt-in messaging tool to a core part of the Base experience. This integration means users will have native, secure messaging capabilities built directly into their crypto experience, making communication integral to their interactions.

Ephemera plans to expand its team across protocol development, decentralized infrastructure, and product design to support XMTP's growth. The protocol's next phase goes beyond messaging, focusing on action. New agent integrations, such as Bankr, Flaunch, and Onit, are transforming chat threads into functional crypto interfaces. For example, Bankr is a trading companion that lives in the Coinbase Wallet inbox, enabling users to send money to everyone in the group anywhere in the world instantly and for free. Flaunch enables token sales inside chats, while Onit allows users to bet on real-world events and receive automatic payouts. These integrations highlight XMTP's potential to enable secure chat experiences around financially motivated communities, whether it's investing with peers, joining prediction markets, or sending money globally.