Decentralized finance platform Exponential has raised $14 million in a seed round led by Paradigm.
Other backers include FTX Ventures, Haun Ventures and Circle Ventures, as well as over 80 angel investors including Balaji Srinivasan, Anthony Pompliano and Elad Gil, according to a company blog post.
The startup is founded by ex-Amazon and Uber veterans who want to simplify DeFi investing; making it easier to discover, assess and invest in yield opportunities.
Exponential CEO and co-founder Driss Benamour previously worked as head of fintech products at Uber, while co-founder and chief technology officer Greg Jizmagian worked at Amazon for over five years and helped to build out Amazon’s voice grocery shopping efforts.
Decentralized finance enables two parties to undertake financial transactions directly without an intermediary. The challenge with DeFi is that this often means interacting with obscure protocols and complex setup processes.
Exponential wants to bridge the gap between web2 and web3 making it easier to invest in DeFi protocols through its platform. “Exponential users will have DeFi instruments at their fingertips,” the company said in the blog post.
State of the market
However, decentralized finance is a whole different beast compared to the consumer apps offered by Amazon and Uber.
Risk appetite has changed for decentralized finance products in recent months as individual investors grapple with macroeconomic headwinds from rising interest rates to surging inflation. There’s also been an uptick in the number of high-profile hacks where investors have lost significant sums of money.
Equally, venture investors have also been less active in the market. Only 15 deals took place in August, which is the lowest frequency of deals for the DeFi category since January 2021, according to data from The Block Research.
Exponential is built to navigate this change in risk appetite with a service called “rate my wallet.” This helps analyze the risk profile of an individual’s current investments and suggest better alternatives.
The platform has assessed over 100 protocols across 20 blockchains so far, according to the company website.
Disclaimer: The former CEO and majority shareholder of The Block has disclosed a series of loans from former FTX and Alameda founder Sam Bankman-Fried.
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