▼ Summary
– Fomo raised a $17 million Series A led by Benchmark, bringing total funding to $19 million, which is an atypical crypto investment for the VC firm.
– The founders secured 140 angel investors from a target list of 200 through warm introductions and cold calls, including prominent crypto figures like Polygon Labs CEO and Solana’s co-founder.
– The app offers access to millions of crypto assets across multiple blockchains with no technical friction and includes a social feature for users to follow others’ trades.
– After adding Apple Pay support, Fomo saw a massive user influx, reaching $150,000 in weekly revenue and $3 million in daily trading volume shortly after launch.
– Fomo charges a 0.50% transaction fee per trade without gas fees and has grown to over 120,000 users, with daily volumes now between $20-$40 million and $150,000 in daily revenue.
The consumer crypto trading application Fomo has successfully secured a $17 million Series A investment, with the prestigious venture capital firm Benchmark taking the lead. This funding round elevates the startup’s total capital raised to $19 million. Founders Paul Erlanger and Se Yong Park charted an unconventional course to attract investment, bypassing a traditional seed round in favor of directly approaching a curated list of 200 ideal angel investors.
Erlanger explained their reasoning, stating that they believed every individual on their list could bring significant value to the company. Leveraging their professional backgrounds at the crypto exchange dYdX, the pair utilized their networks to secure warm introductions, resorting to cold calls when necessary. Their strategy proved remarkably effective, with 140 of their targeted investors ultimately contributing funds.
The list of backers includes prominent figures from the digital asset space, such as Polygon Labs CEO Marc Boiron, Solana co-founder Raj Gokal, and former Coinbase CTO Balaji Srinivasan. Park noted with a smile that while they didn’t reach everyone on their wish list, the vast majority of those they did connect with agreed to invest.
These investors were drawn to Fomo’s vision of a comprehensive platform providing access to millions of crypto assets across any blockchain, all with a promise of a seamless user experience. The app also incorporates a social layer, enabling users to follow and observe the trading activity of friends and influential figures in the community. Although the platform does not yet host every available asset, the founders are confident they will be close to that ambitious target within six months. Currently, users can trade a wide array of cryptocurrencies, from major players like Bitcoin and Ethereum to various meme coins and alternative assets.
The company’s long-term ambition extends beyond cryptocurrency. The ultimate goal is to evolve into a platform where consumers can trade a diverse range of assets, including prediction market shares and traditional securities like bonds.
A pivotal moment for Fomo occurred just one month after its May debut with the integration of Apple Pay. This feature allowed new users to download the app and begin trading almost instantly, triggering a surge in adoption. Erlanger reported a massive influx of users and revenue following this update. The platform quickly reached approximately $150,000 in weekly revenue and a daily trading volume of $3 million.
Fomo generates income by charging a 0.50% transaction fee on each trade, with a minimum fee of $0.95 applied to transactions on the Solana blockchain. Transactions on other networks, such as Base and BNB Chain, have no minimum fee. A key differentiator for the app is that it absorbs the network “gas fees” typically paid by users to process transactions on a blockchain, a feature Park highlighted as a major selling point.
The founders’ extensive angel network strategy yielded an unexpected dividend when three separate contacts independently reached out to Benchmark’s Chetan Puttagunta to introduce him to Fomo. While Benchmark is highly selective and has a limited history of crypto investments, having backed companies like Chainalysis and Toncoin, Puttagunta was persuaded by the app’s explosive growth and decided to lead the Series A round, also taking a seat on the company’s board.
Puttagunta praised the Fomo team, stating they possess a clear vision for simplifying the discovery and trading of crypto assets, a vision that is clearly connecting with users as evidenced by their exceptional growth.
Benchmark stood as the sole institutional investor in this round, with the remainder of the capital coming from both existing and new angel investors. The bet appears to be paying off handsomely. Since the round closed in September, Fomo has expanded its asset offerings and witnessed even more dramatic growth. The founders have now onboarded over 120,000 users. Erlanger shared that the platform is currently handling between $20 million and $40 million in daily trading volume, generating roughly $150,000 in revenue each day.
(Source: TechCrunch)
