At a $20 million cap, Soon is overvalued compared to many other revenue-generating, early stage companies in the online private markets. With just over $1,000 in revenue from beta users, Soon is placing high value on the market potential and competitive advantage.

Cryptocurrency exchange platforms are a $10 billion market in the U.S. today. Popular platforms provide convenient and user-friendly interfaces, enabling users to buy, sell, and manage their crypto holdings with ease, demystifying crypto as an asset class and accounting for the market’s massive 28.3% annual growth rate. As cryptocurrencies gain wider acceptance and recognition, more individuals and institutional investors are seeking platforms to buy, sell, and trade digital assets on trusted platforms.

Mike Shattuck and Aaron Bylund founded Soon. Mike is a technical founder who has spent his career as a software engineer across a number of companies. Aaron has a background in marketing and corporate strategy. He spent time at Nu Skin Enterprises, a health and personal care products company, prior to founding Soon. Both Aaron and Mike have past ventures that ultimately failed or received funding but did not go anywhere. 

Though neither has direct crypto experience (both are self-proclaimed “crypto enthusiasts,” having invested themselves, but never worked in the industry) or success as an entrepreneur, the pair went through leading accelerator Y Combinator in 2022. Through the process, they likely gained management knowledge and an extensive network that could help Soon succeed. 

The team was among Soon’s weaker subratings. Despite its lack of direct industry experience, the team has done well so far to gain early traction and funding. At the end of the day, a team is best measured by its ability to execute, especially in nascent markets.

The competition in the crypto exchange space comes from various players, including established crypto exchanges, traditional investment platforms, and other early-stage fintech startups. Coinbase, Robinhood, and Acorns, for example, each have various degrees of automation when it comes to investing. Solutions like BitPay allow for crypto payment processing, though the solution is on the merchant side. Some businesses, including Microsoft and PayPal, are accepting crypto for payments. And smaller establishments can use point-of-sale hardware to accept cryptocurrency. Each of these solutions competes indirectly with Soon. 

What sets Soon apart is its degree of automation. If there are gains available in a user account, Soon will take the money to reimburse the user for purchases automatically. Soon makes money on the transfer fees and buy/sell spread and initiates the transaction assuming the gains make up for this difference. The user does not have to do a thing. In addition to the automated buying, selling, and reimbursing, Soon takes care of taxes by automatically setting aside earnings. 

These features are fantastic for a very specific type of crypto investor: one who wants to sit back, let the algorithms take over, and invest in crypto assets solely through Soon. Soon integrates with Open AI to create a randomized divestment schedule based on spending activity. The beta testing from June to December 2022 yielded 11% returns on average. This is very appealing to a crypto enthusiast who does not want to hold assets, but rather capitalize on volatility, especially in bear markets. That said, crypto already has a huge adoption hurdle, and letting go of this control may be difficult for investors. The algorithm does allow for customization, but the bread and butter is in the automation. 

Soon is in the very early stages of monetizing, with just $1,662 in beta revenue on the books. Co-founder Aaron Bylund claims Soon is doing $130,000 in annual recurring revenue since the raise page was published. Still, this is a far cry from the $1.6 million in annual recurring revenue projected for the first half of 2023. 

The solution has 1,080 registered users, 150 of whom have invested, according to the raise page. Aaron’s updated numbers include 500 depositors and more than 2,500 registered users. The company’s published goal of reaching 7,000 users by the first half of 2023 was incredibly ambitious, and the team seems to be falling short — as it has with the revenue projections. 

More important than registered users, however, is the conversion to invested accounts. 500 depositors out of 2,500 users will not be entirely representative of the ratio as time goes on. Early crypto technology adopters represent a specific subset of customers who have already overcome the large adoption hurdles associated with digital assets. Many other potential customers still view crypto as a fringe investment and may need more time to assess risk. 

Product adoption is definitely a concern at this stage, but Soon has some impressive backing that could mitigate risk. The company is backed by Y Combinator, Goodwater, Soma Capital, and Dragon Capital, for a total of $2.5 million in venture funding.

Soon is considered overvalued at a $20 million cap compared to other revenue-generating, early stage companies in the online private markets. While the crypto exchange market shows growth potential, Soon faces plenty of competition from established exchanges, traditional investment platforms, and fintech startups. There are many crypto investing apps with auto investing as a feature. To set itself apart from the crowd, Soon will have to continue to prove outsized returns. The technology is so new that it has yet to prove success over time and in a range of market climates. 

Additionally, the team behind Soon lacks direct industry experience and successful entrepreneurial ventures. Although the founders have gone through the leading accelerator Y Combinator, their lack of crypto experience and limited success raise concerns about their ability to execute effectively in a nascent market.

There is also a massive regulatory risk in the crypto space. In the Q&A section of Soon’s raise page, co-founder Mike Shattuck wrote, “Our portfolios are designed to avoid assets that have been clearly identified as securities by the SEC.” Since there is still much ambiguity around the classification of crypto assets, changes in regulations could be a big problem for Soon.

Furthermore, Soon’s performance in terms of monetization and user adoption is at an early stage. With only $1,662 in recorded beta revenue and a discrepancy between projected and actual revenue, the company is falling short of its ambitious goals. While the company is backed by notable investors, there is still a risk regarding product adoption and the ability to attract and retain a significant number of users.

Finally, though Soon’s tax management feature is an impressive differentiator, it only eases the burden on the end user if the user holds crypto solely through Soon. If a customer also has a Coinbase account (or other crypto exchange account) and buys or sells the same assets, the Soon tax features may not be as valuable.

The crypto exchange market is experiencing significant growth, and Soon is well-positioned to capitalize on this market with automated crypto investing and reimbursement. Although the team behind Soon lacks direct crypto experience, the co-founders’ participation in the leading accelerator Y Combinator suggests that they have gained valuable management knowledge and an extensive network, which can contribute to the company’s success.

Moreover, Soon differentiates itself from competitors through its degree of automation, offering features such as automatic reimbursement and tax management. Additionally, despite being in the early stages of monetization, Soon has gained decent user traction and secured $2.5 million in venture funding from reputable investors, including Y Combinator, Goodwater, Soma Capital, and Dragon Capital. This backing not only validates the company’s potential but also mitigates some of the risks associated with product adoption and market competition.

Soon is an automated crypto investing app that connects to users’ bank accounts and automatically invests in cryptocurrencies while reimbursing users’ daily spending with crypto gains. The app achieved 11% returns during beta testing and utilizes tax-loss harvesting to simplify taxes for users. And the founders have raised $2.5 million in venture funding. 

Soon faces plenty of direct and indirect competition. Despite these challenges, Soon differentiates itself through its automation features and has gained traction and funding, positioning it well to capitalize on the growing crypto market.

However, there are some concerns for investors. The company is considered overvalued compared to other revenue-generating, early stage companies. The founders lack industry experience, raising concerns about their ability to execute effectively. Soon’s monetization and user adoption are at an early stage, falling short of ambitious goals. While backed by notable investors, concerns remain regarding product adoption and the company’s ability to attract a significant user base. Additionally, the tax management feature may not be as valuable if users have accounts that hold identical assets with other platforms. 

Nonetheless, the bullish outlook highlights the potential growth of the crypto exchange market, Soon’s user-friendly interfaces, and the support from venture funding and Y Combinator, which could contribute to the company’s success. An investment in Soon may be worthwhile for those with a high risk tolerance.

Report written by KingsCrowd Investment Research Manager Olivia Strobl on May 30, 2023.