Pillow wants to be more than just another platform offering access to crypto investments. The Singaporean start-up, which is today announcing the successful completion of an $18 million Series A funding round, is on a mission to tackle financial exclusion in emerging markets around the world.
“We aim to be a holistic home for digital asset-driven financial services,” explains Arindam Roy, CEO and co-founder of Pillow. “We will enable users to earn, save, spend and invest all from the same platform with an easy-to-understand, cohesive, user experience from within a single mobile-first interface.”
Right now, what Pillow offers its community of 75,000 users in 60 countries is more limited. They can use its app to purchase and manage a range of digital currencies including Bitcoin and Ethereum, as well as US dollar-denominated stablecoins, as well as to swap between assets quickly and simply. Pillow also offers an investment management solution designed to limit risk and generate income.
However, even this functionality provides many investors with a way to save and invest for the future that they don’t currently have, points out Roy. For most people in many of the emerging markets it serves, access to conventional asset classes is very limited – certainly when it comes to international assets that might provide some protection from the turbulence of their home economies. This is one reason why demand for digital assets is increasing so rapidly in many developing countries.
“We founded Pillow because we recognised that people knew why they wanted to invest in digital assets, but they didn’t know how,” Roy adds. The app therefore offers them a simple route to doing exactly that, as well as a range of educational content to help users make better-informed decisions. “We aim to create an educated class of investors,” Roy adds.
In time, however, the ambition is broader. The same frustrations that are driving many people to digital assets for saving and investing apply in other areas of their personal finances, Roy points out. The inefficiency and ineffectiveness of financial systems in many emerging markets leaves people stuck without basic financial services – and vulnerable to economic uncertainty.
“Ultimately, the true potential of digital currency is that it can enable you to escape from the conventional financial system,” Roy says. “If we can find ways to tokenise real-world assets and to make it easier for people to pay through and spend their digital currencies, we can give people the choice not to use their traditional financial systems.”
Getting to that point will require Pillow to add a number of new services to the saving and investment functionality that its app already offers. It will also need to build trust and understanding, Roy concedes. His own experience, growing up in India, is proving formative in this regard. “It took my grandparents’ generation 50 years to learn to trust banks in India, and until then they were stuck with keeping money under the mattress,” he says. “We want to help today’s generation get comfortable with digital assets much more quickly.”
The company’s rapid growth suggests that plenty of people share Pillow’s aspirations. Currently free of charge, the app’s user base has grown 300% since the beginning of the year, and assets under management are up five-fold. The company has launched into large markets including Nigeria, Ghana and Vietnam in recent months.
Ultimately Roy expects it to take three to five years to build Pillow into the all-encompassing app that he wants to offer. But today’s fundraising will help accelerate the trajectory.
The round is led by Accel and Quona Capital, alongside investors Elevation Capital and Jump Capital, and builds on Pillow’s $3 million seed round a year ago. It’s not so much capital that the company needs, Roy argues, but the backing of investors with experience and understanding of digital assets, emerging markets and the consumer market. “We wanted support from people with the expertise to help us move in the right direction,” he says.
Quona managing partner Ganesh Rengaswamy certainly buys into the company’s vision. “Borderless, permissionless money has the power to change lives, particularly in emerging markets, and it can bring more people into financial systems,” he argues. “What Pillow is building can remove the friction of formal financial systems for the underserved, while engaging users in savings and investing behaviours.”