In a bold move that deviates from traditional fundraising methods, Paul Erlenjger and Se Young Park, co-founders of the consumer crypto-asset trading app Fomo, have successfully raised $17 million in a Series A round led by Benchmark, bringing their total funding to $19 million since launching the platform in May.
Rather than opting for a conventional seed round, Erlenjger and Park took a unique approach by identifying 200 potential angel investors. They leveraged their existing networks to facilitate warm introductions, drawing on their backgrounds from crypto trading platform dYdX. When those efforts did not yield enough support, they reached out through cold calls, ultimately gaining interest from 140 out of the 200 contacted individuals.
Paul Erlenjger emphasized the founders’ strategic choice, stating, “We knew that each individual would be valuable to us in business.” This effort garnered attention from prominent figures in the crypto industry, including Mark Boiron, CEO of Polygon Labs; Raj Gokal, co-founder of Solana; and Balaji Srinivasan, the former CTO of Coinbase. Despite their success in garnering support, the founders acknowledged that there remain influential figures, such as Elon Musk, who they have yet to connect with.
Investors were particularly drawn to Fomo’s concept as a super app that simplifies access to a myriad of crypto assets across different blockchains, removing technical barriers. Additionally, the app incorporates a social feature allowing users to track the trades of friends and industry leaders.
Although Fomo does not currently support all blockchain assets, the founders project achieving this within six months. At present, the platform facilitates the trading of major cryptocurrencies like Bitcoin and Ethereum, alongside altcoins, meme coins, and others. They also envision broadening their offerings to include prediction markets and traditional securities, such as bonds.
A month post-launch, Fomo enhanced its user experience by integrating Apple Pay, leading to a significant surge in both user engagement and revenue. “We saw a massive influx of users and revenue,” Erlenjger noted, highlighting their rapid growth trajectory. Currently, Fomo processes daily trading volumes between $20 million and $40 million, yielding approximately $150,000 in daily revenue.
The platform employs a transparent fee structure, charging a 0.50% fee per trade, with a minimum fee of $0.95 for Solana transactions. Notably, there are no gas fees applied, presenting a competitive edge for users holding primary cryptocurrencies.
The founders’ unconventional fundraising strategy proved effective, with three key individuals facilitating a vital meeting with Benchmark, leading to additional funding. Experienced investor Puttagunta, who has previously supported companies like Elastic and LangChain, recognized Fomo’s potential and has since joined the advisory board. He praised the team’s vision, which aligns with the noticeable growth experienced since the app’s launch.
Benchmark emerged as the initial institutional investor, with the remainder of the funding allocated to both existing angel backers and new investors. As Fomo continues to expand its asset offerings, the founders report over 120,000 users, with consistent daily trading volume and revenue.
Overall, Fomo’s journey reinforces the notion that innovative fundraising approaches can yield substantial results in the rapidly evolving landscape of crypto services.
