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

Fomo, a consumer-focused crypto trading application, has successfully raised $17 million in a Series A funding round led by Benchmark, marking a significant investment in the crypto space from this prestigious venture capital firm. With this new round, Fomo has now accumulated a total of $19 million in funding since its launch in May. Co-founders Paul Erlanger and Se Yong Park took an unconventional approach to fundraising by compiling a list of 200 potential angel investors whom they believed could add substantial value to their business. "We recognized that each of these individuals would be instrumental in our success," Erlanger explained. They leveraged their professional networks for warm introductions, leveraging their backgrounds from the renowned crypto trading platform dYdX. In instances where connections fell through, they resorted to cold calling. This strategy proved fruitful, with 140 investors expressing interest and contributing funds. Among the notable backers were influential figures in the crypto world, including Marc Boiron, CEO of Polygon Labs, Raj Gokal, co-founder of Solana, and Balaji Srinivasan, former CTO of Coinbase. While Park humorously noted the absence of high-profile figures like Elon Musk among their investors, he emphasized the overwhelming positive responses they received from the majority of their targeted angels. Fomo's unique selling proposition lies in its vision of a super app that offers users access to a vast array of crypto assets across different blockchains, with a commitment to minimizing technical barriers. The app features a social aspect, allowing users to follow peers and respected leaders to view their trading activities. Although not every blockchain asset is currently available, the founders anticipate nearing that goal within six months. In just a month post-launch, the company introduced a game-changing feature: support for Apple Pay. This enhancement significantly boosted user acquisition and revenue, with the app reportedly generating around $150,000 weekly and achieving $3 million in daily trading volume shortly thereafter. Fomo charges a transaction fee of 0.50%, with a minimum fee of $0.95 for Solana transactions, while avoiding the additional 'gas fees' that often burden users on various blockchains. The founders' strategy of engaging multiple angel investors paid off handsomely, as three individuals facilitated an introduction to Chetan Puttagunta, a partner at Benchmark. Despite the firm’s selective investment approach in the crypto sector, Puttagunta was impressed by Fomo's rapid growth and opted to lead the Series A round, taking a board seat in the process. "Paul and Se, along with their team, have articulated a clear vision for making crypto assets easily accessible and tradable," Puttagunta remarked, noting the impressive growth trajectory since the app's inception. Currently, Fomo stands as the only institutional check in their funding round, which also saw contributions from existing and new angel investors. Following the round's closure in September, Fomo has expanded its asset offerings and is experiencing exponential growth, onboarding over 120,000 users and achieving daily trading volumes between $20 million to $40 million, alongside approximately $150,000 in daily revenue.