Rocketplace raises $9M in seed funding to build the ‘Fidelity for crypto’
Rocketplace has secured $9 million in a preliminary fundraising round as it works to develop a “next-generation asset management platform for crypto.”
Several aspects of this rise stand out. For starters, the money comes at a unique moment in the cryptocurrency sector, during the so-called “crypto winter,” when other significant companies in the market, including Voyager and Celsius, have filed for bankruptcy and others, like Robinhood and Coinbase, have carried out massive layoffs. Second, Rocketplace claims that it is “not just another cryptocurrency exchange” and provides commission-free trading for more than 30 coins.
By placing money distribution and management at the core of its product, it seeks to take things a step further. This is predicated on the idea that the number of new digital financial products produced in the crypto sector will “explode,” and that each of those goods would need distribution.
CEO Louis Beryl notes that in the meantime, clients will require adequate disclosures and compliance, particularly as industry regulation grows.
The founding team’s track record is also noteworthy.
Online lender Earnest was created by Beryl and COO Ben Hutchinson. In 2017, Navient purchased the business for around $155 million. Beryl established Solid Energy Systems, which went public through a SPAC merger on the NYSE earlier this year, and was a partner at both a16z and Y Combinator.
Rocketplace’s seed round was headed by Launchpad Capital, with participation from TTV, Accomplice, Menlo Ventures, and Soma Capital. Its pre-seed round, which was headed by Accomplice and featured funding from Launchpad and Better Tomorrow Ventures, totalled $8 million in two instalments.
Beryl said, “If you look at Fidelity’s business model in conventional finance, there are two large regions – retail and institutional. “In the retail industry, client accounts are used to purchase and sell stocks and bonds. Fund distribution, however, is on the business’s opposite side. Fidelity began to establish its own funds and collaborate with those established by rivals.
The brokerage then developed a business centred on the custody and management of funds.
We’re creating a firm with a similar attitude, said Beryl. And we’re constructing it on top of a very affordable, premium, self-service digital asset platform.
Rocketplace can purchase as its volume increases since it doesn’t charge commissions. It generates money by charging a tiny premium above the amount that a seller is prepared to sell something for (the asking price) (offer).
Beryl, though, is certain that the startup’s primary point of distinction is its capital distribution strategy.
He told TechCrunch, “What I anticipate is going to happen in the crypto world, which is very similar to what we have seen happen in conventional finance, is you start seeing this proliferation of financial instruments that investors can invest in — picture an index in you know, like Vanguard has built.” “So those things come in various forms and sizes, and sometimes they are bullish or bearish on the market… My prediction is that the number of those in the crypto asset class will begin to greatly increase.
Accordingly, Beryl continued, “what Rocketplace is building is the distribution of those products so that retail investors can evaluate those products, invest in those products, get the proper data and tax information on those products, and actually, really importantly, get the appropriate regulatory, compliance, and disclosure framework for those products. None of it still exists.
He cites Voyager and Celsius’s bankruptcy as proof that more performance transparency and more “acceptable” disclosures are required.
Rocketplace now has 10 workers, and it intends to utilise its new funding, in part, to increase that number over the course of the next six months. The bulk of the funds will be used to start the company’s fund distribution operation.
Launchpad Capital’s founder, Ryan Gilbert, said that his company is “eager to work” with Beryl and Hutchinson once again. Gilbert supported the duo’s prior business, Earnest, while working at another venture capital company, Propel.
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He said in an email to TechCrunch that “money distribution and fund management is key to the Rocketplace offering, and timing couldn’t be better.” “We expect the number of innovative digital financial products in the crypto area to skyrocket, and their distribution must be legal and carefully controlled.
The managing partner and co-founder of Atlanta-based TTV Capital, Gardiner Garrard, said his company is “acutely aware that crypto is a crucial element of the financial future” and was attracted to Rocketplace’s goal of making crypto “more accessible for everyone.”
According to Garrard, “the human side of crypto is a major part of the Rocketplace concept, making the asset class more accessible, intelligent, and transparent.” “While the majority of cryptocurrency platforms are constructed with transactions in mind, Rocketplace was created to provide a user-first, all-encompassing experience. The Rocketplace team has the chance to create a long-lasting brand in the conventional financial services industry similar to Fidelity or Charles Schwab.