Flipside Crypto, an analytics startup that helps blockchain and cryptocurrency projects to analyze their “fundamental health,” has raised $7.1 million in a Series Seed Prime round to expand its solutions.
Announcing the news on Tuesday, Flipside said the round was led by Galaxy Digital Ventures, with participation from Collaborative Fund, CMT Digital and Avon Ventures. Previous investors, including Digital Currency Group, True Ventures and Boston Seed, also backed the round.
Last November, Flipside raised $4.5 million in a seed round from investors including Coinbase Ventures. Today’s round brings the firm’s total funding to date to $11.6 million. Flipside said it is now valued at $32.1 million.
With the fresh capital, the startup is looking to expand its team and further develop its solutions. “We’ll be continuing to invest deeply in resources and solutions to enable depth of insights that are able to be acted upon,” Dave Balter, CEO of Flipside Crypto, told The Block.
The firm currently has 14 people, with the majority in data science and data pipelining segments, and by Q1 2020, it will have about six more people, Balter said, adding: “This raise will add a few resources, but it’s really about continued development of the solutions and data we are able to provide to our customers."
Flipside provides a solution called "Chainwalking," which decodes a blockchain network, say Ethereum or Bitcoin, to enable “a deep understanding of stakeholder behaviors including speculators, miners, voters and actual customers.”
“There is a strong demand for analytics that help these companies tie off-chain activities to on-chain results and price, which is exactly what Flipside provides,” said Greg Wasserman, head of venture at Galaxy Digital Ventures, on leading the investment.
Balter told The Block that there are “many” blockchain projects “whose token price and market cap are depressed,” and he believes that these projects will require some form of understanding of their stakeholder behaviors, and thus creating a demand for Flipside’s solutions. “We’d love to chainwalk any blockchain that is seeking to understand its stakeholder behaviors,” he said, adding:
“Chainwalking is free, while derived insights from chainwalking are the part of our business that is fee-based.”
Flipside has three packages for its solutions, priced from $2,000 to $8,000, and its 2019 revenue to date is at $500,000, according to a Medium blog post also published on Tuesday. When asked about revenue expectations going forward, Balter declined to comment.
Some of the interesting insights that Flipside has come across by analyzing nearly 30 blockchain networks are that there are “many many mainnet launches,” however, “most of these organizations haven't planned beyond launching their own chain, and are struggling to identify patterns to focus on customers,” Balter told The Block.
Another trend that the firm has observed is that money flow as a real challenge and opportunity. “Some firms believe miners and investors are hoarding their token creating liquidity problems and further deflating price expectations (we help them prove what is actually happening so they can solve it).”
On a positive side though, a few "above and beyond" blockchains have begun to aggregate actual users for relatively traditional business models, Balter said.
The firm also provides a Fundamental Crypto Asset Score (FCAS) for over 500 cryptocurrencies, which is distributed via data sites such as CoinMarketCap, Messari and MarketWatch, among others.
Startups that are focusing on on-chain data are booming. Just yesterday, startup Elementus, which helps companies spot illegal transactions made with cryptocurrency, raised $3.5 million in a new funding round. Earlier this month Elliptic raised $23 million in Series B funding to expand into Japan and Singapore. CipherTrace, on the other hand, recently raised $15 million, while Chainalysis closed a $30 million Series B round.
Balter told The Block that there is a “healthy” space forming, but what sets Flipside apart is their target customer. “Where a majority of the data organizations consider investors as their customer - Flipside focuses solely on providing business intelligence to blockchains and cryptocurrency organizations."
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