Crypto index platform Alongside raises $11M led by a16z • TechCrunch

Alongside, a crypto index-focused platform has closed an $11 million seed round led by Andreessen Horowitz (a16z), the company exclusively told TechCrunch.

“At a high level, we are building what I describe as an On-chain Vanguard,” Austin Diamond, CEO and co-founder of Alongside, told TechCrunch. “The goal is low-cost index products designed to enable total market exposure to crypto as a whole.”

Investors in the round include Coinbase Ventures, Franklin Templeton Investments, Village Global and Not Boring Capital, as well as angel investors. The startup was founded by Diamond and Jun Ho Hong, the head of engineering; Gauthier Le Meur, its COO; and Rai Sur, its CTO.

“In many ways, we want to be a bridge for new people to access this space,” Diamond said. “Historically, a lot of people have built products for other people in crypto, and that’s not necessarily inclusive of a wider audience, and our cap table reflects that as well.”

Alongside’s name derives from a pun on mutual funds, “where everyone invests alongside each other,” Diamond said. The platform aims to build products for investors to diversify through passive indices.

Last month, the startup launched its first product, the Alongside Crypto Market Index ($AMKT), which gives people broad exposure to the entire crypto asset market through a single token.

The token is “fully secured by the top 25 assets in crypto,” weighted by market capitalization, Diamond said. However, the top 25 excludes stablecoins and cryptoassets with “questionable security status,” Diamond added. “Some assets in the area are under regulatory scrutiny; we can’t include these because we want to be compatible.”

All of the assets are backed 1:1 by the underlying index components and “safely custodial by Coinbase,” Diamond said. The index was set at the top 25 because of liquidity, he added. “If you go further out, there isn’t depth of liquidity for these assets, but the top 25 have enough liquidity.”

The token is available on some global exchanges, crypto wallets, custodians, onramps and Ethereum scaling solutions, including Polygon, Uniswap, SushiSwap, Gate.io, Rainbow and BitGo, to name a few.

The biggest difference between this index product and traditional stock indexes is the exposure to crypto assets, Diamond noted. “Traditional stock indices or ETFs index stock products. But in our case, we want to provide direct exposure to cryptoassets as a whole; that is one of the biggest differences.”

In the future, Alongside will consider launching different products centered around DeFi as a category or layer-2 blockchains as a category, Diamond said. “In the beginning, we just wanted to be very simple.”

Over a 10-year horizon, the idea of ​​a total market for cryptoassets will look very different, Diamond said. “It won’t look like it does now.”

“As the market matures and other asset classes live in the chain, we will be able to build products that look different than what we have today.”