Why Benchmark made a rare bet on cryptocurrencies on trading app Fomo, with a $17 million Series A

Paul Erlanger and Se Young Park, co-founders of consumer cryptocurrency trading app Fomo, have taken an unusual route to raising capital that is paying off for them.

Their app launched in May and they just announced a $17 million Series A round led by Benchmark — an unusual bet on cryptocurrencies for a top-tier venture capital firm — bringing their total funding to $19 million.

Instead of the classic seed round, the founders put together a list of 200 people they dreamed of having as angel investors.

“We knew everyone would be valuable to us in this business,” Erlanger told TechCrunch.

They then worked on their networks to make friendly introductions, both previously working at popular cryptocurrency trading platform dYdX. Failing that, they made cold calls. 140 of their dream angels wrote checks after hearing their voice.

They have landed big names in the cryptocurrency world like Polygon Labs CEO Marc Boiron; Solana co-founder, Raj Gokal; Former Coinbase CTO and super angel Balaji Srinivasan, the founders said.

“There are a lot of people we’ve never been able to reach out to, like Elon Musk,” Park said with a smile, but of those who returned their call, less than a handful said no.

The Angels liked their idea of ​​a super app that would give consumers access to every crypto asset ever (millions of them), available on any blockchain, without any technical friction, as they promised. The app also has a social component built into it, where users can follow friends and leaders they respect to see their trades.

While Fomo does not yet own every asset from every blockchain available, the founders said they are on track to be close to that goal within six months. Among the millions of assets they offer today, users can trade everything from major currencies like Bitcoin, Ethereum and Solana to coins and altcoins, they say.

The ultimate vision is to one day allow consumers to trade all sorts of other assets on the app, from prediction markets to standard securities like bonds.

A month after Fomo launched in May, the founders added a feature that dramatically changed the course of their company: support for Apple Pay. This allows users to download the app and start trading quickly.

“We’ve seen a tremendous influx of users and revenue,” Erlanger said. Fomo immediately skyrocketed to about $150,000 in revenue weekly and $3 million in volume daily, the founders said.

The app collects a transaction fee on each transaction of 0.50% (with a minimum fee of $0.95 for transactions on Solana, and no minimum fee on other less expensive blockchains like Base and BNB Chain). But it does not make users pay so-called “gas fees,” or fees charged by the blockchain to process transactions. This is a real selling point for users interested in holding major currencies, Park said.

Their multi-angel strategy paid off because not one, but three people, reached out to benchmark early-stage investor Chetan Puttagunta to make an introduction, Puttagunta told TechCrunch.

Puttagunta was an elusive option for the lead investor in the seed round that Erlanger and Park were actively pursuing. Benchmark is selective in its choices and does not invest much in emerging cryptocurrency companies. It supported Chainalogy in 2018, along with Toncoin and a few other coins.

But Buttagunta (who has backed companies like Elastic, Cursor, Manus, and LangChain) saw Fomo’s rapid growth and was convinced to seize the opportunity and take a seat on the board.

“Paul, Se and the entire team have a clear vision for making it easier to discover and trade crypto assets,” Buttagunta said. “It is clear that their vision resonates with truly exceptional growth since their launch a few months ago.”

Benchmark was the only institutional screening done by the founders, while the rest of the round went to existing and new angel investors.

So far, it looks like Benchmark’s bet may be paying off. Since closing the round in September, Fomo has added more assets from more blockchains to its app and has seen even crazier growth. The founders say they have more than 120,000 users. “We now do $20 million to $40 million in volume per day, and about $150,000 in revenue per day,” Erlanger said.