Investing in Donut
We are proud to announce our investment in Donut, a new app that makes investing in digital assets effortless. We and the team behind Donut believe that all assets will eventually become tokenized. Donut wants to empower everyone to be an investor in this new asset class. Donut has raised a $1.8M (€1.6M) Seed round led by Redalpine with participation from AngelList’s Philipp Moehring and Andy Chung, N26 Bank board member Marcus Mosen and former N26 CMO Kelly Ford.
Many of our non-crypto friends have approached us in the past two years asking about cryptoassets: What should I buy? And where? How much should I invest? We believe these questions are important but poorly serviced so far. For Fred Wilson it “is the first time that anyone in the world, independent of wealth and domicile, can participate in venture capital style investing in the next big wave of technology.” However, even among the top 100 cryptoassets at least 80% are sub-quality investments, to put it mildly. Therefore, an easy and safe access point that helps retail investors purchase, hold and transact with cryptoassets is extremely valuable.
Enter Donut
“Donut is building a new home for digital assets. Our vision is that over the next decade, most people will have the majority of their wealth stored digitally, be it in fungible or non-fungible tokens. We are making this world possible.” (Donut team)
Donut enables retail customers to invest in digital asset portfolios tailored to their personal profile (risk appetite, age, net worth, income etc.) from their mobile phone in an easy and playful manner. During Daniel’s time at N26, he saw how powerful “Banking by design” can be. In FinTech, trust is key and one way to build it is through design. We have been impressed with the execution the Donut team has shown since they started in April last year. Jordan’s reputation as a stellar engineer has been echoed by many at N26 and is complemented by Neel’s industry insights and execution skills. Dan and Julian joined the founding team adding exceptional product and marketing skills and making this team one of the most complimentary we have seen in the FinTech/Crypto ecosystem. The team’s commitment to transparency via blogposts reminds us of Lemonade, another amazing FinTech.
Our thesis
Donut provides convenience, trust and accessibility to the digital asset market. Cryptoassets will only be the vanguard for a new open financial system running on public blockchains (think: value exchange on an open protocol — similar to information exchange on the email protocol — instead of value exchange across walled gardens like traditional banks). Blockchains and crypto enable completely new kinds of assets: programmable money and digital assets with unique capabilities that move on an open, trustless and efficient infrastructure (public blockchains). Early versions of these assets include NFTs in gaming and collectibles, programmable securities (new forms of financial contracts) and self-enforcing securitized debt and derivatives. For a full list of decentralized finance applications, see here and here.
The legacy infrastructure used by banks, brokers, asset managers and others in the financial industry will not be suited for these new kinds of assets and financial products. As the usability and security of the parallel open financial infrastructure grows, more and more traditional assets will become tokenized and move onto the new infrastructure. Eventually everybody will be financially included — independent of domicile, wealth and regulations that currently prevent most of the world’s population from participating in our financial system.
As we have seen in many cases in the tech start-up world before, Donut has the potential to move from being a specialized player in a niche (cryptoassets) into a leading asset manager of the new world. Donut helps onboard more users into this powerful technology ecosystem today and paves the way for retail investors into an open financial system tomorrow. It facilitates a future where all assets are tokenized and accessible to everyone in an equitable way without rent-extracting middlemen. We are incredibly proud to be part of their journey.
P.S.: Donut is hiring Frontend Engineers with React experience. They are also looking for “Entrepreneurs in Residence” for the summer.
EarlyBlock is an early stage blockchain VC fund deeply rooted in Berlin’s ecosystem. The founders Simon and Daniel are part of ETHBerlin’s core team. ETHBerlinEins was Ethereum’s biggest european hackathon to date. Reach out to learn more: daniel@earlyblock.io, simon@earlyblock.io
