Coinbase and Digital Currency Group Co-Led $4.5 Million into Flipside Crypto Analytics Startup
Seed rounds are a helpful way for startups to prepare for their own ventures. Investors from all over the cryptocurrency market often contribute, and the same can be said of a recent seed round for Flipside Crypto. In an exclusive annoucement to CoinDesk, the seed round was co-led by Coinbase Ventures and Digital Currency Group. The two firms joined other investors already involved, which were True Ventures and Castle Island Ventures.
The seed round ended on November 21st, and there are a lot of details that are still fairly quiet in this situation. Coinbase’s contribution has not been published, but the total raised during the round was $4.5 million. While Coinbase hasn’t made comments about their decision to join, Flipside Crypto CEO Dave Balter noted,
“Coinbase has substantial interest in what data can do to help their customers be most effective at understanding and take part in this space. We look forward to working with them on that.”
The Flipside Crypto company worked to evaluate activity in the network, watching developer contributions and other actions to see how the assets are being utilized in the industry.
Their surveillance covers 1,000 crypto assets, scoring them on their market caps and trading patterns. There’re multiple algorithms involved in the process, helping to split the exchange activity and other transactions. Flipside board member Adam D’Augelli, who is also a partner of True Ventures, said,
“It starts with understanding the difference between speculation and actual usage.”
At this point, Flipside has already created multiple partnerships to offer evaluation reports, though about 100 investors are using the closed beta versions already. The public launch of the platform isn’t scheduled until next year, but there are other institutions that intend to partner with Flipside at that point.
Balter pointed out that the only ones with any genuine traction right now are the top 100 cryptocurrencies. Still, he wants to create a holistic perspective of maturation with blockchain activity and developer activity. He added,
“Price is an ineffective tool for understanding the value of these assets. What you really need to pay attention to is, are customers using this product? How is that changing? And are developers actually building?”
With this collection of analytical data, Flipside believes that they can improve the prediction of market signals. Ripple, for instance, has been working on releasing their project to help banks utilize their XRP token, coinciding with a spike in XRP’s fcast score in September. Balter said,
“As they [Ripple] begin developing for that partnership to get announced, they are doing code work. They’ve got customers testing the product. They are doing all the things that a typical business would do before making an announcement. It’s highly indicative of good, healthy company behaviors. If they are focusing on the business, you will see the fcast [score] move. If they are just focused pumping the price, that fcast isn’t going to change.”
D’Augelli believes that these types of analytics have to be used for that specific moment, due to the way that they can quickly become invalid. He added,
“If you’re a crypto project today you don’t have a way to benchmark yourself against others, to reach out to your end customers, to understand if people are engaging in the right way. Those same tools that are useful for investors to understand the fundamental value of projects also help projects build better customer experiences and understand how they are doing.”
Next year, when Flipside launches the public platform, users will need to choose a subscription to gain access to in-depth reports and live updates. These subscriptions start at $25, going up to $300, depending on the details that the subscriber wants access to. Presently, the mailing list shows about 1,000 individuals who are interested in subscribing.
Balter concluded by adding,
“The projects that [will] win, that move through this winter of despair into growth, like Amazon from the dotcom bubble, are the ones that are actually showing that customer movement.”