Why we invested in Atani

The entire crypto ecosystem at your fingertips

Usability has always been and remains a fundamental issue in trading digital assets. Despite the relentless advances of the crypto ecosystem, the fragmentation of this sector still presents significant challenges to investors. Atani is here to fix that, offering a full suite of digital asset trading, market analysis, portfolio tracking and tax reporting solutions, all powered by a robust, scalable, and minimal latency technological infrastructure.

The growth of crypto and asset tokenization

Crypto is an exponentially growing market, having reached $2Trillion+ market cap (May 2021). The end of 2020 marked a trigger for institutional interest in crypto, increasing prices and welcoming millions of retail investors globally. Renowned investors including JP Morgan, Blackrock, Ray Dalio or Elon Musk have been endorsing cryptocurrencies while large public listed companies such as Microstrategy and Square have been purchasing bitcoin as part of their corporate treasury. Further, actors such as Tesla and Apple have announced that they plan to accept payments in bitcoin. All of these actions have led to a significant boost in crypto market confidence.

As more and more assets are being tokenized (from artwork to real estate funds), the potential of this market truly becomes unlocked, representing not just what many still regard as speculative crypto investing but rather a form of accessing the entire financial ecosystem. Although Atani’s platform is currently centered around the cryptocurrency vertical, as the market evolves, we believe that they have the potential to be a winner in this broader context.

A fragmented market

Despite this enormous upside, the crypto sector is riddled with inefficiencies. As in traditional financial markets, investors require a number of solutions to operate effectively (trading, custody, tax reporting etc.). Companies have attempted to tackle this problem from a number of angles. There are solutions for novice users, such as Coinbase or Robinhood, that are lacking in features and that charge excessive commissions for trading; verticalized solutions that include exchange aggregators and tax reporting companies; or single exchanges that are trying to become a one-stop-shop.

Each of these approaches presents significant issues. Firstly, investors tend to use a number of exchanges in order to access different tokens (or take advantage of arbitrage opportunities) and therefore require services (like tax reporting or portfolio tracking) that can function properly across these platforms. These different solutions are often unable to integrate, and thus leave the user with a high administrative workload and a lack of portfolio-wide operability.

An end-to-end solution

Atani is the first global crypto end-to-end aggregator, with a mission to solve the lack of usability and the problems that investors and traders experience when they interact with the real crypto market. Atani’s software removes friction by bundling services in a single platform that: unifies trading on more than 20 exchanges (such as Coinbase, Kraken, Binance…), automates tax reports (in more than 30 countries), offers 100+ tools for technical analysis, provides portfolio tracking, and that soon will integrate custody (wallets) and DeFi (Decentralized Finance).

As an integrating layer that enables users to access many different components of the crypto ecosystem, we believe Atani will be able to avoid the elevated competitive rotation that exists across exchanges within the market, and to remain the de-facto platform as it continues to evolve. Furthermore, all of these services are entirely free for their user base, with no hidden fees; a unique differentiator in a sector where commissions are often elevated and opaque. Soon a premium plan will be available for pro traders who wish to connect directly via API.

Differentiating tech infrastructure

The Atani team has developed a big data, non-custodial trading architecture with no latency that processes over 1 billion daily events in real-time, representing >1GB of text data. The ground has been set and the microservices infrastructure is replicable for new features and markets at scale, allowing Atani to maintain its competitive advantage and to facilitate access to the latest components of the crypto ecosystem.

Atani offers a similar experience to Interactive Brokers, but with the sophistication of a decentralized network. Crypto transactions can be likened to Forex in that each exchange has its own set of prices for a specific trading pair — there is no centralized market (unlike stock exchanges). Atani’s architecture allows users to operate in a decentralized manner across these marketplaces, disrupting the traditional investor→broker →exchange model.

Unlike the vast majority of companies operating in the space, Atani offers a non-custodial solution; they at no point have access to the users’ APIs or funds. When a user completes a market order, this is encrypted on their device and sent directly to the exchange — without ever going through Atani’s servers — where the order is decrypted and executed. Additionally, all that is required to sign up for an account is an email — no private information is necessary. Security is a top priority for the company and this characteristic allows users complete privacy.

Being a tech layer that does not directly execute market orders confers an additional benefit from the regulatory perspective: Atani is not subject to financial regulation in any country, as they neither control the users’ funds nor complete market orders. This has allowed them to be a global company from day 1 and will continue to save them legal headaches moving forwards.

Targeting an unserved market segment

The crypto market can loosely be divided into 4 primary segments, each of which has greatly different ways of operating and consequently diverse needs:

Atani is currently targeting the retail trader and trading desk segments, looking to fulfill their end-to-end needs such that they can operate from a single platform. Competitors either offer point solutions for this market or target the institutional players, with an entirely different value proposition centered around a custodial architecture and a limited activity. Companies such as FalconX that are aimed at this client base do not fulfill the needs of retail traders and trading desks, as they do not offer full access to the crypto ecosystem. Unlike retail traders and trading desks, institutional investors do not carry out complex and leveraged transactions and typically require access to few tokens (they do not tend to speculate on low cap tokens as they are highly regulated and more risk averse).

Atani has initially focused on integrating a large number of exchanges and incorporating advanced orders and futures/derivatives trading that these advanced users require, and they are currently working on DeFi integrations that will be united within the same interface. In a second phase, Atani will target mainstream, the largest user segment. Following the acquisition of Tagomi, Coinbase has been the go-to exchange by most institutionals, having reached $119 Bn in institutional trading volume in 2020. However, Coinbase’s income is 30x greater for each dollar traded by retail investors as opposed to institutionals, showing the true potential of this user base. By continuing to reduce frictions and remove barriers from the blockchain ecosystem, Atani will facilitate the development of these users into retail traders, who will grow their portfolio and be able to carry out more complex investing strategies.

Top tier founder-market fit

As any early-stage investor will tell you, the first thing to look for in a company is an exceptional team. Atani’s founders are siblings Paul and Haydée Barroso, who started investing in bitcoin back in 2013. Having suffered crypto’s lack of usability for many years and fed up with not finding a solution that covered their needs, they decided to build Atani.

Paul previously developed a trade matching engine and data intelligence hub for Morgan Stanley’s Fixed Income Group. Before founding Atani, he built a proprietary cryptocurrency trading desk and traded across spot, margin, derivatives, options and OTC markets for digital assets. Haydée is also an avid crypto trader and experienced professional within finance, starting her career as a strategy consultant for global financial institutions with the Boston Consulting Group. Prior to founding Atani, Haydée led the Digital Strategy of Banco Sabadell, where she developed an expertise in the FinTech ecosystem and Venture Capital. It was here that I first got to know her and see what she was capable of, as our roles closely interacted during my time at Banco Sabadell’s Corporate Venture fund, and I am fortunate to now call her a close friend.

Their strong relationship and complementary skillsets, in addition to their deep understanding of the problem make them the ideal team to embark on this journey. When Haydée and Paul initially presented me with Atani (at the time, e-Toshi) I was inspired by their mission and had conviction in their ability to realize it, becoming the first investor to commit to their pre-seed round. The team has consistently and relentlessly executed their roadmap, and the strong progress since then was identified by Conexo Ventures’ startup-tracking algorithm. Through my close relationship with the founders we were quickly able to reach an agreement and persuade the Investment Committee to participate in the seed round, alongside pre-existing investors JME Ventures and Encomenda Smart Capital.

Conclusion

The compelling manner in which Haydée and Paul’s are able to communicate their vision not only to investors but to employees is what makes Atani truly dangerous. Their capacity to attract great talent has allowed them to execute effectively, building a far more complex infrastructure than they had initially imagined. Their understanding of the user and feature prioritization based on their personal experience as well as feedback from their community has enabled them to develop a product around their target’s most pressing needs. As the tokenized economy continues to evolve, we expect Atani to be at the forefront, continuing to add functionalities to facilitate access to the entire ecosystem from a single interface.