Mobile app which helps users save and earn high yield with DeFi Donut closed a $2m funding round, bringing its total funding to date to $3.8m.
With Redalpine adding to their commitment, other investors included Inventures, Compound founder Robert Leshner, Entrepreneur First and a group of enthusiastic users, including the owners of the Washington Nationals baseball team.
The company intends to use the funds for user growth and product development ahead of planned additional funding in early 2022. Donut is on a mission to build a more inclusive financial world by empowering anyone to grow their wealth with digital assets.
Led by founder Neel Popat, Donut is a DeFi powered mobile app that allows users to grow their wealth with digital assets. The company claims users can earn between 4 to 10% APY by investing in digital assets through its app. Since releasing its high-yield interest generating product in September 2020, the company’s early user base and assets under management have seen 40% monthly growth.
The sector has seen rapid expansion since last summer, often referred to as ‘DeFi summer,’ when the firm grew from $1bn to $60bn in assets driven by an explosion of lending and borrowing protocols.
According to Popat, people earn less than 0.1% in interest in their bank account. “DeFi lending offers a new way to work your money harder, but significant time investment is required to understand which services to trust. We’re making DeFi accessible to a broader audience, giving them the opportunity to earn 4-10% APY via three simplified options,” he said.
For DeFi giants such as Compound, whose lending protocol unlocks value for billions of dollars in assets each day, Donut plays the crucial role of introducing the mainstream investing community to a clear value proposition – high yield, it said. The company was recognized by Andreessen Horowitz as one of the few companies “advancing a new model for >2% yield on deposits by incorporating crypto securities lending.”
Leshner said, “DeFi needs an app like Donut where anyone, regardless of their crypto knowledge, can start investing in digital assets.” He believes startups like Donut are “bringing DeFi to the masses.”
Echoing a similar sentiment, Redalpine general partner Harald Nieder said, “DeFi is brimming with new solutions. However, it is still very disconnected from the traditional world of finance. Financial solutions in the future will be an eclectic mix of both traditional and DeFi. It will require trust, curation and ease of access to DeFi for a new financial paradigm. The Donut team is at the forefront of bridging this gap, building that additional layer and establishing that new financial paradigm.”
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