Pillow aspires to be an all-in-one platform that helps even novice users save, spend and invest in cryptocurrencies. The Singapore-based startup announced that it has raised $18 million in Series A funding, co-led by Accel and Quona Capital, with participation from Elevation Capital and Jump Capital.
The app currently has more than 75,000 users in more than 60 countries. It supports 10 digital assets, including Bitcoin, Ethereum, Solana, Polygon, Axie Infinity, and USD-backed stablecoins USDC and USDT, and plans to expand to more than 50 assets in the coming months.
Founded in 2021 by Arindam Roy, Rajath KM and Kartik Mishra, Pillow focuses on emerging markets such as Africa and Southeast Asia. Its founders say that since the beginning of the year, it has grown its user base by 300%, with assets under management growing 5x. It recently expanded to Nigeria, Ghana and Vietnam, among other markets.
Before founding Pillow, Roy and KM explored web3 while working at identity verification and AML software provider HyperVerge, while also holding jobs in the traditional financial industry. During this time, the two started a Discord server on the side to integrate people into web3, which eventually grew to more than 15,000 people.
“We saw a pattern of recurring problems,” the two told TechCrunch. “People don’t know how to pay gas fees, they don’t know how to bridge different blockchains, people don’t know what transaction they’re authorizing and they end up losing funds.”
At the time, the two met Mishra, who was the head of operations for Indian product delivery startup Dunzo, and began discussing how to solve the onboarding problem at scale.
“Ultimately, we realized that the challenge is that crypto trading today does not fit the mental model of how retail users perceive trading. You will need a strong technical background to seamlessly trade crypto,” they said.
As a result, Pillow was born to make the use of encryption understandable.
To do that, the Pillow team has to tackle some big issues. The first is awareness, as the majority of people still think that crypto is just buying and selling Bitcoin, without understanding other use cases. The second is complexity, as using crypto as a whole means understanding gas fees, blockchain technology and bridging. “A person who just wants to trade is not going to scale that learning curve,” they said.
Pillow solves these problems by simplifying one-click crypto investments and trades, instant trades, and saving money using daily one-click interest savings. It plans to do the same for other crypto services such as payments.
To use Pillow for the first time, users sign up using their email accounts and then provide KYC information such as live selfies and national IDs. They then receive a short lesson on the potential risks of investing in digital assets before choosing which ones they want to deposit or invest in. Before their initial investment, they are given another lesson on the potential risks of this item.
After that, they can deposit cryptocurrencies from their own wallets or another crypto platform by making a transfer to the crypto wallet address displayed on Pillow. In some countries where Pillow has partnered with local, compatible on-ramp service providers, users can also purchase crypto with their local fiat currency. Pillow supports fiat currency deposits and withdrawals through local partnerships in Nigeria, the Philippines and Vietnam, with plans to add more in Southeast Asia, Africa and Latin America with its new funding.
The startup’s largest user base is in Nigeria, and it also has significant presences in India, Ghana, and Vietnam, and growing user bases in Brazil, the Philippines, and Sri Lanka. It focuses on retail investors, enabling them to start with investments as small as $5.
Since Pillow’s users come from different geographies, its closest competitors also come from all over the world. They include crypto exchange Luno in Africa, multi-asset exchange Pluang (another Accel investment) in Southeast Asia, and global crypto savings app Nexo. Pillow’s founders say it differentiates itself by aiming to become a holistic home for digital asset-based digital financial services that allows crypto users to earn, save, spend and invest from the same platform.
Pillow is currently in development and plans to introduce trading commissions as new products are introduced, including exchanges and real-world assets. Currently, it profits from returns generated beyond the 5% to 10.42% returns accessible to users. Pillow keeps a small percentage of the difference generated and another part also goes into its performance reserves.