But Gabriele Musella, Oleg Giberstein and ZdenÄk Höfler found a niche that’s helped their crypto firm grow into a site with 130,000 worldwide users and $1 billion of trade since its launch in 2019.
Musella explains: “We democratise the tools that big banks and institutions have been using for a while, bringing the power of automation to the masses.”
Coinrule is free for those trading less than $3,000 a month while heavy traders pay up to $500 a month.
Users can follow one of the platform’s 10,000 set strategies or build their own “rules”.
Features range from simple “stop losses” to long and complex conditional statements. Coinrule’s platform sits on top of the major crypto exchanges, including Binance and Coinbase.
“Trading isn’t difficult, we think people have a brain to structure their own trades and make up their own rules,” says Musella.
Turnover: £1 million (December 2020-December 2021)
His own experience shows it’s easier with hindsight.
The ebullient Italian-born Londoner (he’s betting on Brexit being reversed “within 20 years”) first bought Bitcoin in 2012: “I paid about $300 and made about 5%. I put the cash towards a holiday to the Bahamas. I enjoyed the trip, although with hindsight, that wasn’t a good choice.”
Those coins would be worth millions today.
Musella worked in user experience for UBS, the NHS, and WPP before revisiting his latent cryptocurrency account in 2016 and becoming interested in the underlying technology.
“I started trading massively, and wanted to write some scripts but I’m not a good coder.”
He met co-founders Giberstein, who is German, and Höfler, who is Czech, at a London accelerator “and we decided to stop our careers that weren’t going anywhere and start something together. I still have our first sketch somewhere… one day I’ll make it an NFT.”
Interest from a Hungarian accelerator saw the three move to Budapest for a few months early on. Musella broke up with his girlfriend of five years to move.
“But in four weeks we built the [basic version] of the app, got $25,000 in the bank from the accelerator, found our first 100 customers, and started building our company.”
By March 2020, revenues were around $4000 a month and the entrepreneurs were ready for a bigger fundraise. A London VC fund offered £250,000 and a £4 million valuation.
“Then the pandemic hit, everything shut, I ran back to Italy — I thought lockdown would be better with good food — and the VC said, ‘sorry, that valuation… we can’t do it any more’.”
The Coinrule founders decided to turn down a lower funding offer, which valued their company at $1.5 million.
The startup was forced to lay off and furlough staff, while those who stayed took pay cuts.
Musella says: “It was a storm: no money, Covid everywhere, and we were still trying to grow the company.”
Eventually Coinrule fundraised £530,000 on crowdfunding site Seeders. The resulting publicity saw new traders flock to their site too.
Coinrule now enjoys revenues of $140,000 a month on $100 million to $150 million-worth of trades.
“The growth was fast and crazy,” Musella admits. “We didn’t have time to reply to everyone, so our Trustpilot rating went down a bit, but overall it was a good thing.”
When renowned US seed funder Y Combinator got in touch, Musella and his fellow founders handed over about 6% of equity — “It was a bit painful” — in return for mentorship by the founders of firms including Airbnb, Twitch and Kayak. They ended up raising $2.2 million.
Backers included the Twitch and Kayak founders they’d worked with.
Today Coinrule has 15 staff around the world. Future plans include expansion to Asia and moving into non-crypto assets. “Where firms like IG Index and eToro moved from traditional investments into crypto, we’re doing it the other way round.”
Running against the tide seems to work well at Coinrule.