Coinbase, DCG Join $4.5 Million Seed Round for Crypto Evaluation Startup

Flipside Crypto wants investors to think beyond market capitalization, and Coinbase apparently agrees.

Revealed exclusively to CoinDesk, the exchange's Coinbase Ventures arm and Digital Currency Group co-led the analytics startup's extended seed round that closed on November 21, alongside True Ventures and Castle Island Ventures.

Although the size of Coinbase's investment was not disclosed and the company declined to comment on the move, all told Flipside has raised $4.5 million.

"Coinbase has substantial interest in what data can do to help their customers be most effective at understanding and take part in this space," Flipside Crypto CEO Dave Balter told CoinDesk.

Founded in 2017, the startup analyzes 1,000 crypto assets and scores them, factoring in global market caps and trading patterns as just 5 percent of each asset's overall "Fcast" score.

The firm uses multiple algorithms to map out trading patterns and says it can distinguish exchange activity from other types of transactions, like payments or moving crypto to a personal wallet.

Similar to CoinDesk's Crypto Economics Explorer, the idea is to give a more well-rounded view of crypto valuations rather than fickle trading prices.

Over 100 investors have used these metrics from the startup's closed beta while Flipside partnered with institutions like the investment bank Canaccord Genuity to create detailed evaluation reports.

"If you're a crypto project today you don't have a way to benchmark yourself against others, to reach out to your end customers, to understand if people are engaging in the right way," D'Augelli said.

As Flipside's backer Coinbase looks to aggressively add new assets in 2019, such metrics could prove useful for the exchange unicorn as well.