Hedgehog Technologies, a platform that lets investors sync their cryptocurrency wallets and exchange accounts to visualize their portfolios in aggregate, has raised $1.6 million to develop a crypto robo-advisor.
Dragonfly Capital led the seed round, which also had participation from Baroda Ventures and startup accelerator Y Combinator.
The funding follows crypto exchange Coinbase’s deal to buy Zabo, a startup that offers a similar, all-in-one portfolio dashboard. However, while Zabo white-labels its service through other companies, Hedgehog offers its app directly to consumers. In traditional financial services, aggregators like Plaid and Yodlee have long enabled consumers to obtain a comprehensive view of their bank and brokerage accounts.
Hedgehog does not currently charge its nearly 7,000 users a fee. Instead, its founders say their long-term plan is to charge exchanges a sort of referral fee for pushing clients to purchase crypto through the exchanges’ platforms.
Hedgehog Technologies is not to be confused with Hedgehog Markets, a prediction betting platform on the Solana blockchain that recently raised its own seed round.
The company was co-founded in 2017 by college friends Taylor Culbertson and Colton Dillion, who were later co-workers at mobile fintech platform Acorns, which allows users to invest spare change in stocks and bonds, and uses a robo-advisor to help them make decisions. That company is now on the cusp of going public through a proposed merger, valued at $2.2 billion, with a special-purpose acquisition company.
After leaving Acorns in the mid-2010s and starting a digital marketing company, Culbertson and Dillion discovered Ethereum. The idea of self-executing smart contracts resonated with them after a freelance client refused to pay for services rendered, Culbertson, Hedgehog’s CEO, told CoinDesk in an interview.
Once Culbertson and Dillion learned more about crypto, they set about starting Hedgehog, even pulling in their brothers.
“We were like, ‘This is the future. This is it,” Culbertson said.
In retail's corner
Hedgehog’s robo-advisor feature will go live in the next few months, Culbertson said. It will assess connected accounts on the platform and make suggestions to users about how to balance their holdings and take advantage of price dips to purchase crypto at bargain levels.
“A lot of crypto platforms look at retail users as price-agnostic users,” Dillion said. “Retail flow is very wanted, because you can make a lot of money off that, especially in market making. We’ve taken the opposite approach--we’re building a platform for retail users. We’re catering to the user that’s kind of disadvantaged in this environment.”
Hedgehog’s founders say the company’s relationship with Hopscotch, the platform’s clearing partner run by Culbertson’s brother Morgan, who also serves as Hedgehog’s head of trading, will connect users with prices 0.5% better than what competitors offer.
UPDATE (Aug 25, 18:00 UTC): Corrects passage about two co-founders' history (they met in college, not childhood).
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