Editor’s note: Startup Spotlight is a regular feature in WRAL TechWire, taking a deep dive into companies that are hoping to help shape the ever-increasing digital future, from code to pharmaceuticals.

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RALEIGH – A young, Raleigh-born emerging tech startup is hoping to lead the open-source revolution for what some technologists are calling the “next big thing”: Web3.

This week, blockchain startup Kaleido officially dropped what it says is the “first open-source SuperNode,” a plug-in blockchain framework enabling companies – big and small – to launch and scale their own secure blockchain projects.

Called Hyperledger FireFly, it includes “more than 200,000 lines of enterprise-ready code,” the company says. That allows companies to tap into Web3 applications like digital assets, non-fungible tokens, and smart contracts “without having to start from scratch.” Plus, it’s free and fast. The software stack could speed up the development process “anywhere from 10 to 100 times,” the company said.

“The FireFly SuperNode will change the game for them,” says its co-founder and CEO Steve Cerveny.

For those not in the know, Web3 is the latest Silicon Valley buzzword that seeks to usher in new iteration of the web. At its most basic, it refers to a decentralized internet based on the blockchain – the shared ledger systems used by cryptocurrencies like Bitcoin and Ether.

Web3 fans believe it’s the future of the internet. In 2021, investment into Web3 startups skyrocketed to $23.7 billion, Pitchbook reported. Meanwhile, the emerging Web3 industry was estimated to be worth almost $3 trillion at the end of 2021, according to analysis by Electric Capital. 

But it also has its critics. Some are calling it just another “fad.” As the Capital report noted: “We are still in the early innings of Web3.”

On the ground, however, Kaleido’s founders says they’re witnessing a surge in demand from companies looking to embrace these disruptive technologies.

“Web3 is exploding with technological innovation, rapid user growth, and value creation. Enterprises are scrambling to keep up,” Kaleido’s co-founder and chief operations officer Sophia Lopez told WRAL TechWire.

Hyperledger Firefly will help those companies “make the leap” to Web3, she said.

Kaleido’s Steve Cerveny and Sophia Lopez pictured outside its headquarters at Raleigh Founded’s Capital Club on West Martin Street.

The next Red Hat?

In the bigger picture, Kaleido’s founders, a team comprised of mostly former IBMers, say the decision to share their technology – for free – also positions them at the helm of the next open-source movement.

“Just as Red Hat led the open-source revolution in the Web 2.0 world from right here in the Triangle, Kaleido is leading the new open-source charge for the Web3,” Lopez said.

She’s referring, of course, to one of the region’s most-exulted startup success stories, Red Hat, founded in 1993 by Bob Young and Marc Ewing. Instead of protecting trade secrets and patenting their products, the pair decided to share their evolving operating system, Linux, with the wider tech community. It paid off. In 2019, IBM bought the company for $34 billion, the tech giant’s largest deal ever and one of the largest tech acquisitions in history.

“Kaleido has picked up the open source-torch,” Lopez said, adding that she predicts SuperNode FireFly will emerge as the chief operating system for Web3, just as Linux was for Web 2.0.

While it’s still too soon to tell if that will, in fact, materialize, many blockchain experts see Kaleido’s latest move as a step in the right direction.

“This approach eliminates barriers that have stood in the way of many companies interested in bringing to life their businesses based on blockchain technology,” said Paweł Laskarzewski, CEO and co-founder at Synapse Network. “[It could] significantly influence the popularization of blockchain technology.”

As it so happens, Kaleido is located just a few blocks down the street from Red Hat. Its team of around 28 employees is headquartered out of Raleigh Founded’s Capital Club on West Martin Street. Since launching its cross-cloud platform in 2018, it has been deployed in a range of industries generating more than 1 billion blocks mined on the Ethereum blockchain — and counting.

The Hyperledger Foundation – launched by 21 founding members including IBM and Red Hat — initially seeded the FireFly project in early 2021 when Kaleido open sourced its multi-chain blockchain abstraction and orchestration code. Today, “a diverse community of Web3 developers and enterprises use and contribute to FireFly,” the company said.

Blockchain consortia such as RiskStream Collaborative in the insurance industry, Synaptic Health Alliance in healthcare, and TradeGo in commodity trade finance are already in production today using FireFly, it said in its release.

Last October, WRAL TechWire profiled Kaleido as part of its “Tomorrow’s Unicorn” series, which spotlighted homegrown startups tipped to hit the $1 billion valuation mark in the coming years.

At the time, Kaleido said it was growing at an astonishingly clip – “around “3-5X, depending on market segment” – though they remained tightlipped on exact numbers. It also boasted partnerships with Amazon Web Services (AWS) and Azure.

Six months later, it remains the top-rated product for both its blockchain-as-a-service and platform on G2, besting tech giants Amazon, Ethereum and Salesforce. It also won a National Science Foundation (NSF) grant for blockchain interoperability research.

Lopez said Kaleido continues “to grow its market impact” and remain cash-flow positive. She also hinted that a Series A fundraise could be around the corner.

“[We] will likely be raising the second half of this year to fund additional global growth in sales and marketing as well as continued new product innovation,” she said.

For Web3 fans and detractors, watch this space.

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