Crypto is dead. Long live crypto.
No matter what side of the debate you fall on, one thing is undeniable: There is no lack of startups launching with an eye on digital currencies.
A record $25 billion in funding went to blockchain companies last year, according to CB Insights 2021 State of Blockchain report. The market has gotten so hot that crypto companies are launching their own investing vehicles focused on startups in the space.
Insider has been tracking the next wave of hot new startups focused on crypto.
Check out these pitch decks to see how founders are selling their vision and nabbing big bucks in the process.
Crypto staking made easy
From the outside looking in, cryptocurrency can seem like a world of potential, but also one of complexity.
That’s because digital currencies, which can be traded, invested in, and moved like traditional currencies, operate on decentralized blockchain networks that can be quite technical in nature. Still, they offer the promise of big gains and have been thrusted into the mainstream over the years, converting Wall Street stalwarts and bankers.
But for the everyday investor, a fear of missing out is settling in. That’s why brothers Ethan and Eric Parker built Giddy, a mobile app that enables users to invest in crypto, earn passive income on certain crypto holdings via staking, and get into the red-hot space of decentralized finance, or DeFi.
“What we’re focusing on is giving an opportunity for people who otherwise couldn’t access DeFi because it’s just technically too difficult,” Eric Parker, CEO at Giddy, told Insider.
Retirement accounts for crypto
Todd Southwick and Blake Skadron stuck to a simple mandate when they were building out iTrustCapital, a $1.3 billion fintech that strives to offer cryptocurrencies to the masses via dedicated individual retirement accounts.
“We wanted to make a product that we would feel happy recommending for our parents to use,” Southwick, the CEO of iTrustCapital, told Insider.
That guiding framework resulted in a software system that helped to digitize and automate the traditionally clunky and paper-based process of setting up an IRA for alternative assets, Southwick said.
“We saw a real opportunity within the self-directed IRAs because we knew at that point in time, there was a fairly small segment of people that was willing to deal with the inconvenience of having to set up an IRA” for crypto, Southwick said. The process often involved phone calls to sales reps and over-the-counter trading desks, paper and fax machines, and days of wait time.
iTrustCapital allows customers to buy and sell cryptocurrencies using tax-advantaged IRAs with no monthly account fees. The startup provides access to 25 cryptocurrencies like bitcoin, ethereum, and dogecoin — charging a 1% transaction fee on crypto trades — as well as gold and silver.
A crypto neobank
It was during a fourth-year business class that Aaron Bai and Sahil Phadnis had their light-bulb moment to found Pebble.
The then-UC Berkley students were assigned a group project to pitch a startup to the rest of the class. It was early-2021, when crypto was riding high and re-emerged as a trending topic after digital currencies like Bitcoin, Ethereum, and Litecoin experienced a lift in the market.
“Me and Aaron wanted to do a crypto one and the entire group was like, ‘No, this is a scam, we’re not going to do anything crypto,'” Phadnis, the startup’s CTO, told Insider. “It was kind of a wow moment.”
Private market data on the blockchain
For investors in publicly-traded stocks, there’s typically no shortage of company data to guide investment decisions. Company financials are easily accessible and vetted by teams of regulators, lawyers, and accountants.
But in the private markets — which encompass assets that range from real estate to private credit and private equity — that isn’t always the case. Within real estate, for example, valuations of a specific slice of property are often the product of heavily-worked Excel models and a lot of institutional knowledge, leaving them susceptible to manual error at many points along the way.
Inveniam, founded in 2017, is a software company that tokenizes the business data of private companies on the blockchain. Using a distributed ledger allows Inveniam to keep track of who is touching the data and what they are doing to it.
Blockchain for private-markets investing
Securitize, founded in 2017 by the tech industry veterans Carlos Domingo and Jamie Finn, is bringing blockchain technology to private-markets investing. The company raised $48 million in Series B funding on June 21 from investors including Morgan Stanley and Blockchain Capital.
Securitize helps companies crowdfund capital from individual and institutional investors by issuing their shares in the form of blockchain tokens that allow for more efficient settlement, record keeping, and compliance processes. Morgan Stanley’s Tactical Value fund, which invests in private companies, made its first blockchain-technology investment when it coled the Series B, Securitize CEO Carlos Domingo told Insider.
Blockchain-based credit score tech
A blockchain-based fintech startup that is aiming to disrupt the traditional model of evaluating peoples’ creditworthiness recently raised $30 million in a Series B funding led by credit reporting giant TransUnion.
Four-year-old Spring Labs aims to create a private, secure data-sharing model to help credit agencies better predict the creditworthiness of people who are not in the traditional credit bureau system. The founding team of three fintech veterans met as early employees of lending startup Avant.
Existing investors GreatPoint Ventures and August Capital also joined in on the most recent round. So far Spring Labs has raised $53 million from institutional rounds.
TransUnion, a publicly-traded company with a $20 billion-plus
, is one of the three largest consumer credit agencies in the US. After 18 months of dialogue and six months of due diligence, TransAmerica and Spring Labs inked a deal, Spring Labs CEO and cofounder Adam Jiwan told Insider.
Pay-as-you-go compliance for banks, fintechs, and crypto startups
When Themis founder and CEO Neepa Patel set out to build a new compliance tool for banks, fintech startups, and crypto companies, she tapped into her own experience managing risk at some of the nation’s biggest financial firms.
Having worked as a bank regulator at the Office of the Comptroller of the Currency and in compliance at Morgan Stanley, Deutsche Bank, and the enterprise blockchain company R3, Patel was well-placed to assess the shortcomings in financial compliance software.
But Patel, who left the corporate world to begin work on Themis in 2020, drew on more than just her own experience and frustrations to build the startup.
“It’s not just me building a tool based on my personal pain points. I reached out to regulators. I reached out to bank compliance officers and members in the fintech community just to make sure that we’re building it exactly how they do their work,” Patel told Insider. “That was the biggest problem: No one built a tool that was reflective of how people do their work.”
Infrastructure for crypto and Web3 exchanges
0x Labs, a Web3 startup that builds infrastructure used by decentralized crypto exchanges, raised $70 million in a Series B funding round last month.
VC firm Greylock Partners led the funding round, which also pulled in investment from European hedge fund Brevan Howard and leading crypto exchange Coinbase. Internet entrepreneur Reid Hoffman and “Morbius” star Jared Leto also participated in 0x Labs’ Series B.
Decentralized exchanges allow for peer-to-peer crypto transactions to take place without a centralized intermediary. 0x Labs builds infrastructure for decentralized businesses and developers.
“We help businesses to eliminate the complexity of building in the increasingly fragmented decentralized exchange space,” 0x Labs co-founder and co-CEO Amir Bandeali said. “We provide solutions that make it easy for app developers to incorporate exchange functionality and deliver the best selection of tokens at the best prices to their users.”