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Today, many SaaS companies are focused on providing tools for the enterprise. At the same time, we are in the beginnings of big business looking different. Specifically, with the creation of Decentralized Autonomous Organizations (DAO), business is becoming decentralized and it has fundamentally evolved due to web3. According to The Block, there were 1.7 million people in DAOs with 16 billion dollars in AUM as of 2021. Although we are seeing DAOs increase in popularity, these organizations require services that will allow them to run efficiently.
Rain was designed to be the resource for DAOs that will provide credit and money management services to these organizations. Currently, many of these DAOs are forced to use personal financing methods to accomplish their business goals. According to Lightspeed Partner, Ansaf Kareem, "Right now, what we were seeing is a lot of people working at decentralized companies are using either their own AmEx cards, business banking cards or even paying expenses from their personal accounts, which obviously is just a messy way to start to build a company". Anyone who has run a business before knows that it isn’t the best business practice, which is why Rain has a strong possibility of finding product-market fit in this burgeoning industry.
Recently, Rain raised a seed round of 6 million dollars with Lightspeed being the lead investor in the round. Other participants in the round include crypto-focused firms such as Coinbase Ventures, Uniswap Labs, and Alliance DAO. Additionally, Rain’s founders Charles Naut and Farooq Malik assembled a fantastic group of angels headlined by Balaji Srinivasan, the former CTO of Coinbase. With these people and the organization’s conviction in Rain, the company has the support of some of the top respected minds in tech and web3. While Rain’s investors are top-notch and will be pivotal in the company’s success, the company’s founders are the drivers of the company realizing its vision.
The founders of this innovative project, Charles and Farooq are both multiple-time founders. Farooq’s background includes management consulting at firms such as Accenture and Booz Allen Hamilton. He has also gained experience in many finance roles such as private equity and other investment positions. Additionally, he has held product leadership roles at early-stage companies and has furthered his passion for startups by being an OnDeck Fellow. This combination of financial, product, and founder experience are strong assets that will help Farooq lead Rain toward a successful journey. Charles has a very robust technical background as he studied computer science, where he had multiple experiences at startups. He was formerly a program manager at Microsoft. After his experiences at Microsoft, Charles decided to exercise his founder chops and sold a company to Intuit where he stayed for a few years as a principal software engineer. Like Farooq, Charles is also an OnDeck Fellow and has partaken in the startup ecosystem by being an angel scout for Lightspeed partners and First Round Capital. With Charles’ demonstrable technical experience and startup involvement, his skill sets compliment Farooq’s which will lead to the execution of Rain’s vision.
With DAOs and web3 being a very new industry, there will be many people who will be the first movers in the space. Therefore, Rain is leading the charge with its product offering and is looking to gain a first-mover advantage. With that being said, there is always competition. Competition can be from new companies or from incumbents who are looking to penetrate new markets. In this vertical, new startups tackling this issue include Starlight, Multis, and Coinshift. The primary incumbent in this space would be Brex.
Starlight is a crypto management tool for companies that are built on Gnosis Safe Technology. Gnosis is non-custodial which creates individual access to the funds of the companies. Starlight appears to be a very useful tool to help companies manage their crypto through features such as buying crypto, expense management, and wallet setup. While it is predictable that Starlight may want to offer corporate cards in the future, it doesn’t seem like that is the primary focus of the company which is different from Rain. Furthermore, Starlight’s customer profile is not directly endemic to web3 organizations which is different from Rain’s primary customer.
Coinshift is also a treasury management tool that aims to focus on crypto organizations. Coinshift is a very robust platform as it helps teams save on gas fees for mass payouts and export transaction history for accounting reporting purposes. The platform also allows for crypto organizations to perform swaps, set spending limits, receive payment notifications, and make transfers. Although more features are coming into the product, it doesn’t appear that a corporate card offering will be on the roadmap soon. Coinshift’s product suite appears to be more mature, which is a result of the company having raised series A funding with backers such as Tiger, Sequoia, and Alameda Research.
Multis describes itself as an all-in-one application to help web3 organizations manage their crypto finances. This software is also built on Gnosis similar to Starlight, which would help with wallet security and custody. Multis’ features include monitoring of an organization’s finances, transaction pattern analysis, accounting functions with Quickbooks integrations, and collaborative management capabilities for teams. In the future, a corporate card will be included in Multis’ product suite putting the company in direct competition with Rain.
The easily understood incumbent competitor for Rain is Brex. Brex’s specialty is providing credit cards to startups. Additionally, Brex has spend management tools, integrations, and payment solutions. The Brex corporate card allows startups to have larger credit limits (10-20x) than other cards without personal guarantees. Additionally, Brex’s corporate offering affords founders access to strategic venture debt. While Brex is not a crypto native company, its rewards can include cashback in Bitcoin. Brex is a full-service platform that even offers banking services to startups as well that are insured by the FDIC.
Ultimately, Rain is an innovative product that will provide financial access by offering corporate solutions for crypto native companies, particularly DAOs. DAOs have a unique use case and more are beginning to form, allowing Rain to become one of the first movers in the corporate card and money management space for these businesses. Rain’s founding team features two multiple-time founders who have complementary technical and operational skillsets. Rain also has the support of some of the best investors and will be monumental in providing capital and guidance throughout Rain’s journey. As one can imagine, a few other entities are striving to be the provider for Rain’s ideal customers. In general, Rain’s competitors are either not offering corporate card services at all, or they are not focused on offering corporate card services to DAO or other crypto-native companies. With Rain only launching its corporate card option and spend management tools today, it will be exciting to watch the growth of the company in parallel with the evolution of DAOs and crypto.
Thank you for reading this piece. If you LOVE this article, you can send a tip to Cryptojeter.eth (my ETH address)! Follow me on Twitter @CryptoJeter and retweet this post! Feel free to shoot me a DM as I love meeting new folks!
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