As FTX’s recent collapse has some rethinking the future of cryptocurrency, startups in the space continue to receive funding.
A group of Ohio State University students dropped out of school to found one of them, Coherence Finance Inc., and raised an undisclosed amount of funding from Columbus-based Drive Capital LLC.
Next, they moved the business to Chicago.
Co-founders Andrew Gunderman, Sage Farrenholz and Kevin Li – who were in their senior year for computer science degrees – created the platform that lets users buy, sell and build their own crypto bundles. They're gearing it especially for newcomers to the currency.
“Ultimately, the average person (is) going to start using something when it’s more convenient for them or when it solves their problems better than something else does,” Gunderman told Chicago Inno. “The answer for crypto isn’t to put out a ton of educational content. The answer is to build products that are easier for them to use.”
Coherence won $45,000 in the Solana Riptide hackathon before the Drive round.
The startup now is working out of Drive's Chicago office space in Fulton Market. The VC firm expanded its investment territory upon raising $1 billion over two new funds over the summer.
"Columbus is a great city for startups, but for a financial company like ours, Chicago is just objectively better in terms of talent (and) potential business partners," Gunderman said in a written statement to Columbus Inno.
In less than three months since the move, Coherence has forged major relationships through introductions the team could not have accessed from Columbus, he said. For example, the startup was able to join the Global Digital Asset and Cryptocurrency Association, a self-regulatory association building global policies and procedures to ensure market integrity and build public trust.
Coherence has immersed itself in Chicago's growing crypto market, Gunderman told Chicago Inno.
“I think a lot of crypto companies are centered in very few cities, and Chicago is one of them," he said.
The company recently received SEC approval and plans to launch the app soon that will serve essentially as a robo-adviser to retail investors through a proprietary algorithm.
"The future has a lot of optimism, at least for Coherence specifically," Gunderman said. "A lot of our market is going to be trying to raise in this [down] market, and I think for us you’re going to have a lot of the competition die out. And when the market recovers, we’re going to be in a really good spot."
He's also optimistic about all the institutional money coming into the market right now.
Goldman Sachs, for example, plans to spend tens of millions of dollars to buy or invest in crypto companies after the collapse of the FTX exchange, Reuters reported.
“When you’ve got all these institutions getting into crypto now, it’s going to bring so much retail trust, which is going to bring in retail dollars, and I think we’re going to be sitting there with open arms ready to get all those people," Gunderman said. "I see the long-term use for blockchain especially."
Carrie Ghose of Columbus Inno contributed to this report.
