Lightyear Buys US Blockchain Startup Backed By Visa, To Move Business To Stellar

The Stellar Development Foundation purchased Chain, the San Francisco-based startup building blockchain technology for the financial industry, a deal that has long been speculated about. The acquisition was carried out by a for-profit branch of the Stellar Development Foundation, called Lightyear. The Chain and Lightyear brands will both be retired post the deal.

The financial details of the deal are not known. In June, Fortune had reported that Stellar was in talks to acquire Chain and the sale price would be $500 million in Stellar’s digital currency lumens.

"Chain, Inc. today announced it has been acquired by Lightyear Corporation, a Stellar-focused commercial entity formed last year with the support of the Stellar Development Foundation," Interstellar announced on the Medium blog. "The Chain and Lightyear brands will be retired and the combined company will be re-named to Interstellar."

Interstellar’s product responsibility will also include StellarX, a recently announced marketplace for trading assets on Stellar. StellarX is currently in beta and will launch publicly soon. Interstellar has plans to employ 60 people, with its headquarters in San Francisco and offices in New York City and Singapore. The Medium blog post said that Interstellar will make it easy for developers and enterprises to leverage Stellar as a platform to build novel financial products and services.

“All of the clients that we have now have effectively shifted from using a traditional database model to using a tokens model, issuing assets on a local environment,” said Adam Ludwin, CEO of the newly formed Interstellar.

Lumens was created by Stellar, a company founded in 2014 by Ripple co-founder Jed McCaleb. McCaleb will take over as the chief technical officer.

Chain previously accumulated more than $43 million in venture funding from investors including Khosla Ventures, RRE Ventures, Blockchain Capital, Pantera Capital, Nasdaq, Visa, Citi Ventures, Thrive Capital, BoxGroup, and Haystack.

As part of the deal, Chain’s current enterprise customers using its Chain Core software for permissioned blockchain—including Visa, Nasdaq, and Citigroup—will now be served by Interstellar. Ludwin compares the permissioned blockchain environments running to Chain’s existing clients as a layer that will sit on top of the public blockchain platform created by Stellar and powered by the lumens cryptocurrency.

About the acquisition, Fortune had said in June: "The pairing makes sense — Stellar has the money, and Chain has the engineering talent."

The lumens cryptocurrency is valued at $0.19, with a total market cap of $3.6 billion, down 76 percent from the peak it touched this year in January.