Decentralized Finance App Donut Raises $2M to Make Crypto More Accessible

by Jeremy Porr
June 22, 2021
The crypto sector has seen massive amounts of growth since last summer and decentralized finance apps like Donut are reaping the benefits. Since launching its app in September of last year, the company’s user base and assets under management have seen 40 percent monthly growth.
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Los Angeles-based fintech company Donut announced Tuesday that it raised $2 million in seed financing to bring decentralized finance to the mainstream. The round was led by Redalpine and brings the company’s total amount raised to $3.8 million.

The crypto sector has seen massive amounts of growth since last summer due to an explosion of interest among younger investors using apps like Robinhood for the first time.

Decentralized finance (DeFi) apps like Donut are reaping the benefits. Since launching in September of last year, the company’s user base and assets under management have seen 40 percent monthly growth.

DeFi apps use cryptocurrency and blockchain technology to manage transactions. Typically DeFi apps offer up a cryptocurrency to a lending pool and it collects interest, which then works to grow your savings.

“Today, many people earn less than 0.1 percent in interest in their bank account. This simply is not acceptable,” Neel Popat, CEO and founder of Donut, said in a statement. “DeFi lending offers a new way to work your money harder, but significant time investment is required to understand which services to trust.”

To get started on Donut’s platform users first need to link their bank account. Donut can then collect spare change to save from your day-to-day purchases or you can schedule recurring deposits. The platform generates fixed or variable interest rates in real-time. Once you’ve saved up enough you can choose to move your earnings in and out of the app without any fees, according to the company.

“We’re making DeFi accessible to a broader audience, giving them the opportunity to earn 4-10 percent APY,” Popat continued.

Donut will use the fresh raise to drive product development and user growth. In addition to its LA presence, Donut has an office in Berlin, Germany. The company plans to raise an additional round of funding in early 2022.

Additional investors Inventures and Compound founder Robert Leshner participated in the round, among others.

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