Cryptocurrency investment management startup CoinTracker has raised $1.5 million in seed funding from some heavyweight investors, the firm announced on Tuesday.
Backed by seed accelerator Y Combinator, the round was spearheaded by Initialized Capital - an early Coinbase investor that was in part established by Reddit co-founder Alexis Ohanian.
Protocol Labs founder and FileCoin creator Juan Benet and Gmail creator Paul Buchheit also notably took part in the round.
CoinTracker co-founder Chandan Lodha told CoinDesk that the company's core premise is to "make crypto more accessible, easier to use and simpler for a mainstream audience."
"I think one of things that appeals to some of the folks that are in the round is that we're taking this not well understood and confusing and complicated space and just making it super easy so that anyone interested in the space could get involved," he told CoinDesk.
Order out of chaos
In the interview, Lodha said that the company was born out of his and co-founder Jon Lerner's frustration with tracking their crypto investments. The ex-Google employees initially tried to use a spreadsheet to keep track of their investments, logging each transaction manually.
"That works fine for the first 10 trades or when you have a very simple transaction history," he said, "but, over time, you start doing more trades or start having more exchanges or more coins - it gets very out of control."
The team then added API integration and Google apps scripts, which Lodha described as a "really heavyweight hack-y solution" for what seemed like a simple problem.
This "pain point" prompted Lodha and Lerner to develop a simpler front-end for the product, which eventually evolved into "a simple dashboard for a unified interface of all your crypto assets."
"The initial differentiator that got us some early traction was that instead of people having to manually enter in each trade one at a time, we synchronized the different exchanges and wallets that people have. So they just connect them once, and then it pulls in all of their transaction history retroactively and going forward, and then they could see how their [investment] performance was going without having to do anything."
Most recently, CoinTracker introduced a tax feature to further simply crypto investors' experience. The new tool "parses all the different trades and transactions you have and actually outputs a filled-out IRS Form 8949," Lodha said.
"It saves people a lot of hassle," he added.
Lodha and Lerner don't intend to stop at taxes and have plans to take on other aspects of the crypto space that are currently inaccessible.
"We started by dealing with tracking and taxes and making that super easy, but hopefully over time we can do that to other areas as well," Lodha said.
The co-founders plan to use their seed funding to realize this goal, first by expanding their team to include more full-stack developers.
"There are obviously many areas of crypto that are very confusing and complicated," Lodha said. "I really don't like that it comes across as such a complicated and inaccessible space."
Businessmen and coins image via Shutterstock