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Ethereum “Money Lego” Compound Secures $25 Million Series A

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Compound, the builders behind one of the most popular decentralized finance apps on Ethereum, just raised an impressive $25 million war chest in a Series A fundraising round that was backed by some of the cryptocurrency arena’s biggest investors.

Revealed on November 14th, the Series A raise saw venture capital firms like Andreesen Horowitz (a16z), Polychain Capital, Paradigm, and Bain Capital Ventures, throw a new round of chips behind the promise of the DeFi app’s future and growing ecosystem. a16z was the raise’s largest investor, although at an unspecified sum.

Ethereum Lego

With the new funding secured, Compound chief executive officer Robert Leshner told Fortune that the name of the name going forward will be making the project’s crypto lending services readily usable by mainstream, non-tech users. As a step in that direction, Leshner said the DeFi protocol will be integrated with other major cryptocurrency companies, e.g. Coinbase, by the end of next year .

And while the Compound team is the main driving force behind its associated dApp, the company plans to continue phasing out their direct stewardship in favor of a more decentralized governance process. To that end, Leshner said:

“As with Bitcoin, we want to ensure that no one, including the company that built it, can exert undue influence on Compound’s protocol. Corporations come and go but we want to build a protocol that lasts forever.”

Of course, lasting forever is a big aim; but that Compound will last a long time already seems clear considering all the other rising Ethereum DeFi “money lego” projects that are currently relying on Compound’s open infrastructure.

Take the example of InstaDapp, which recently raised its own seed round of $2.4 million on the appeal of its automated “bridge” for crypto lenders wanting to move positions between Compound and Maker and vice versa. For context, both Maker and Compound are currently in the top three DeFi projects per value locked within their protocols according to tracker site DeFi Pulse.

a16z: a Big DeFi Believer

Both in word and in deed, powerhouse private venture capital firm a16z has been betting big on DeFi.

First, the firm made waves last fall when its crypto arm conducted a “strategic purchase” of MakerDAO’s MKR governance token, which is used to guide the growth of the popular Dai stablecoin. In spending $15 million on the acquisition, a16z bought up six percent of the entire MKR supply at the time.

The VC firm also created a buzz last month when it bought up $235,000 worth of SNX, the associated token of Synthetix, another current top 3 DeFi project per DeFi Pulse that lets users create synthetic assets on Ethereum.

Now with a16z’s investment in the Compound team, the company has completed the “skin in the game” trifecta where decentralized finance’s biggest fledgling projects are concerned. On the news of Compound’s Series A raise, general partner Chris Dixon hailed the project as poised to achieve:

“Compound is a lending protocol that is open to anyone in the world, that disintermediates banks and allows anyone to earn interest on their money. We’ve worked with Robert [Leshner] and his team for over two years and think they are world class technologists and entrepreneurs.”

But a16z isn’t just content to back the promising DeFi projects of today, as the firm is also interested in fostering the next waves of innovation in the sector. Last week, the company unveiled its new Crypto Startup School (CSS), a seven week educational program for crypto startup founders.

“We think that sharing the most important lessons we’ve learned could accelerate the development of existing projects, and inspire more talented people to join the space,” Chris Dixon said of the program.


William M. Peaster is a professional writer and editor who specializes in the Ethereum, Dai, and Bitcoin beats in the cryptoeconomy. He's appeared in Blockonomi, Binance Academy, Bitsonline, and more. He enjoys tracking smart contracts, DAOs, dApps, and the Lightning Network. He's learning Solidity, too! Contact him on Telegram at @wmpeaster

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