Avalanche blockchain developer Ava Labs is raising $350 million

The developer behind the Avalanche blockchain, Ava Labs, is raising $350 million in funding at a valuation of $5.25 billion, Bloomberg reports.

Why it matters: Although Ethereum still looms large as the first choice for most decentralized app developers, investors still see an opportunity for faster and cheaper alternatives to emerge.

Flashback: This financing quickly follows $230 million raised by the Avalanche Foundation through a private token sale last year.

• Polychain and Three Arrows Capital led the investment, and were joined by the R/Crypto Fund, Dragonfly, CMS Holdings, Collab+Currency, Lvna Capital and a group of angels.
• And in March, the Foundation announced a $290 million fund to promote subnet development on its network.

Details: Ava Labs was founded by Cornell professor Emin Gun Sirer and released Avalanche as a proof-of-stake alternative to the slower, more costly Ethereum blockchain.

• Since its launch, Avalanche has attracted nearly 250 active decentralized apps, according to DappRadar.
• And AVAX, the token underpinning the chain, has risen to the top ten in market cap, based on CoinMarketCap data.

The intrigue: Ethereum’s long-awaited transition from proof-of-work to proof-of-stake has been delayed (again).

• The Ethereum 2.0 upgrade and the adoption of layer-2 scaling solutions could help alleviate some of the congestion and transaction fees ETH applications face.
• But in the meantime, the delay creates an opportunity for blockchains like Avalanche and Solana to attract users and developers based on speed and cost.