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Foundation raises $7 million to bring “sovereignty” back to the disorderly crypto world

Just days after rival hardware wallet startup Ledger announced it would be collaborating with iPod creator Tony Fadell on its next generation hardware wallet, Foundation Devices announced a $7 million seed round to further develop its “sovereign computing platform,” which it claims helps its users “reclaim their digital sovereignty.”

The company’s flagship product, Passport, is a $260 hardware crypto wallet designed with security and a mobile-first approach that resembles a Vertu luxury phone from the mid-2000s.

“The entire cryptocurrency space is built on a foundation of open source. It only works because it’s open. Our strong belief is that open source software must run on open source hardware.” Zach Herbert, CEO, Foundation Devices

With each new device release, the business takes a fresh approach to hardware wallets by open sourcing both the hardware and software. That’s right; if you’re interested, you can inspect each and every facet of the design of any of its goods, from the smallest detail to the largest, right there on GitHub. According to the organisation, open source is essential to achieving its goals.

Polychain Capital led the $7 million seed round for the Foundation (apparently waving the flag of crypto winter at the moment, given that while purportedly having more than $600 million under management, the fund seems to have spent about $9 on its website design).

Greenfield Capital and Lightning Ventures are new participants in the round, while Third Prime, Warburg Serres, Unpopular Ventures, and Bolt are among the existing investors who are making follow-on investments. The note was a SAFE and the maximum value was $35 million. (Full disclosure: Haje’s previous employment was as Bolt’s director of portfolio, although he was not involved in any investment decisions related to Foundation Devices. As a result of Haje’s departure, Bolt became Foundation’s newest investor.

The first Passport was reportedly sold in the “thousands,” and the updated version was released in March of this year. At this year’s Baukunst Creative Technologist conference, the company’s founder and CEO, Zach Herbert, who offered a novel perspective on the development of cryptocurrency. (The presentation “Not Your Computer, Not Your Keys” is archived on YouTube.)

The collapse of FTX should serve as a reminder of the value of maintaining custody of one’s own affairs. The tremendous danger of keeping cryptocurrency in an exchange wallet has now been shown beyond reasonable doubt. It should serve as a warning that regulators are not there to safeguard you against corruption. Finally, it serves as a wake-up call with regards to the news media. The coverage of FTX in the mainstream media has been terrible, Herbert stated in an interview with Tyler Mincey of Baukunst, who is also on the board of directors of Foundation. I don’t know how you can read the article in The New York Times or The Washington Post, two highly reputable publications, when there are accounts on Twitter offering fantastic coverage of the obvious, intentional fraud that took place. You can get far more balanced and accurate reporting on Twitter. People are beginning to realise this as well. It’s very bad that so many folks have seen their retirement funds vanish.

In April of 2020, the Foundation was established with the goal of creating “a seamless, end-to-end sovereignty experience” for its customers via the usage of open source hardware and software. The corporation has made strategic decisions, such as producing its goods in the United States, with security as its first priority. It’s safe to say that the company’s founder isn’t a big fan of outsourcing production elsewhere.

“There’s a geopolitical imperative, and a security imperative, to manufacture in the United States. I think we’re moving toward a multipolar world and it’s only going to get crazier. I personally would never trust a device to store my bitcoin that was made in China,” Herbert said. “And I want to be on the ground at the factory myself. We manufacture in New England, and I live in the Boston area. I’m at the factory at least every couple of weeks.”

If there’s one thing that’s clear, it’s that the company’s products appear unlike any other cryptographic hardware wallets. That did not happen by chance.

“We call the style we’re going for “digital deco,” after the art deco movement’s distinctive visual aesthetic. Color and elaborate decoration are welcome here. Herbert said, “For some reason, the Bitcoin business has gravitated toward darker hues.” That’s the incorrect way to go about things in our field. My vote is for a message of hope for the future. Our design should represent the fact that Bitcoin is meant to be a hedge against a bleak future.

And they’re taking a hard stance against cryptocurrency exchanges: Herbert told CoinDesk, “We want to play a significant role in helping people to withdraw their bitcoin from exchanges and attain digital sovereignty.”