Sam Ragsdale, Ryan Sproule, and Mason Hall, three engineers with a shared goal of solving the long-standing challenge in software, have raised $10 million in seed funding for their company, Merit Systems. The funding is co-led by Andreessen Horowitz’s crypto fund and Blockchain Capital.
Merit Systems is a startup that aims to address the “attribution problem” in software development, particularly in the open-source community. Open-source software, which makes up over 97% of the apps consumers use daily, relies on contributions from tech giants and independent programmers. However, without a sustainable economic model, it is difficult to keep the ecosystem alive.
The company’s founders believe that a protocol is needed to properly attribute and reward contributors proportionally to the value they create. Chris Dixon, managing partner of Andreessen’s crypto fund, agrees, stating that open source is “poorly funded and too reliant on altruistic contributions.” He notes that Merit is building a protocol that addresses this issue.
The startup has its headquarters in a 3,000-square-foot former factory in Brooklyn, which was once a Domino Sugar Refinery. The team is still in development, with a post-funding valuation of $55.5 million. They expect to roll out a broader release by the end of February after gathering feedback from early testers.
The company aims to sit “in the middle,” connecting software buyers and users with the actual creators of the technology. By resolving the attribution problem, Merit believes users will pay directly for the software they use, creating a sustainable economic model. The team is currently looking to add seven new hires, focused on in-person work culture, as they believe the idea flow between people is crucial in an early-stage company.