Introduction
Digital assets such as cryptocurrencies and non-fungible tokens are risky investments. The cryptocurrency market is volatile, and there’s no guarantee investors will get returns in the long run. But index funds help mitigate risk by providing access to a diversified portfolio of digital assets.
Ember Fund is a startup that offers crypto and other digital asset-focused index funds. Using the Ember Fund financial technology app, users can invest a small amount of money in a cryptocurrency, metaverse, or decentralized finance index fund with a low management fee. We reached out to co-founder and CEO Alex Wang to learn more about why he’s fascinated with the industry and what Ember Fund’s approach to bearish markets is.
Note: This interview was conducted over phone and email. It has been lightly edited for clarity and length.
Funding Round Details
- Company: Ember Fund
- Security Type: SAFE
- Valuation: $80,000,000
- Min Investment: $50
- Platform: Republic
- Deadline: Jul 6, 2022
In your own words, how would you describe Ember Fund?
We’re a Web3/crypto investment management platform wrapped in a beautiful mobile app for anyone in the world to use.
What inspired you to take the leap and start this company?
At the time, I was working for an artificial intelligence (AI) and computer vision company. It was an amazing experience, but I realized that AI, in many ways, was the centralization of power. Large nation states and entities that had access to large amounts of AI wielded all the power. Crypto fascinated me because it was the complete opposite of that. It was the purest form of the decentralization of money and power. Like many, I became obsessed and knew it would transform everything. The biggest pain point to crypto was (and continues to be) understanding and access. I am passionate about solving that.
Who is on your team and how did you come together?
My co-founders and I were all working at the AI company together. I led product, and they led the engineering teams, so we had worked a few years together there and became friends. From there, we recruited an amazing team, including people from TikTok, Acorns, the Dave app, Google, and more.
How is Ember Fund transforming the cryptocurrency and digital asset management industry?
We’re the only app on the app store at scale that provides curated Web3 portfolios in a completely decentralized infrastructure.
What prevents bigger companies such as Coinbase from competing with Ember Fund? What makes your product defensible?
We’ve developed quite a bit of smart contract tech in-house that will be hard to replicate in the short term. Just for reference, there are probably only a few thousand people in the US that know how to build this stuff. It’s a short-term advantage, but we’ll scale before the rest of the world catches up. We also have multiple patents pending around it that we don’t really intend to enforce but have just as an insurance policy.
Why did the company’s net income go down from a loss of $541,610 to a loss of $1.59 million from 2020 to 2021?
We spent about $1.5 million in 2021 paying gas fees for our users. We’ve since solved this by going to Layer 2. Without this cost, we would have been close to breaking even.
How do you intend to use the money you raise this round to scale the business?
There are only two major costs at this company: people and marketing.
What do you want potential investors to know about you and/or your company?
Despite the pullback in the markets, we’re more excited than ever about our mission. We tend to be contrarian thinkers in that, in bear markets, it’s the best time to hire, expand, and place bets versus the general narrative right now to conserve cash. We’re in a strong position to do that. On that note, we’re hiring!
As you think about the business 5-10 years down the road, what do you see exit opportunities looking like? Have you set any future goals for the company?
It’s really hard to think five to 10 years ahead, especially in crypto. Our core thesis has remained the same: build the easiest onramp in the world for users to invest in Web3 portfolios. The technologies, protocols, and strategies need to evolve quickly but all serve the core idea about delighting the user in their investing experience.
As a minority and underrepresented founder, what difficulties have you encountered working on your company? What advice would you give to other underrepresented founders?
I can’t speak for other industries, but crypto is so diverse and I love that about our industry. Go in with the mindset that you don’t have a handicap. I think that’s the best mentality to have. Looking back, there probably have been opportunities that were closed off to me because of the color of my skin, but I wouldn’t want to work with those companies anyway.
We look forward to seeing where Alex and his team take the company. Ember Fund is currently raising on Republic.
