The news: Seashell, a new Seattle fintech startup that says it can offer up to 10% interest to users, raised a $6 million seed round co-led by top Silicon Valley firms Khosla Ventures and Kindred Ventures. Other backers include Shark Tank’s Mark Cuban; Robinhood co-founder and CEO Vlad Tenev; Coinbase Ventures; longtime tech startup investor Elad Gil; and former CFTC Chairman J. Christopher “CryptoDad” Giancarlo.
The model: Seashell is taking on traditional banks by giving consumers a simple way to generate high yields. It takes cash from users and invests in safe haven assets such as gold and “dollar-pegged digital assets.” The idea is that Seashell will attract borrowers who pay higher interest fees, thus generating higher yields for its users compared to incumbents. The 15-person company makes money by sharing the profits it gives back to users.
Yes, but: Seashell is not FDIC-insured, and there is a risk that users can lose their investment. The company says it invests in only “highly stable and over-collateralized tangible and digital assets.”
Philip Bond, a professor of finance and business economics at the University of Washington, said Seashell looks like a mutual fund, but one that invests in different types of assets compared to publicly traded financial assets.
“Seashell appears to simply be a particular type of investment fund that is being marketed as if it is almost a bank,” Bond said.
Hok said Seashell is not a bank — not yet, at least. He also described Seashell’s investing model as “a very secure system.”
The founder: Hok graduated from Yale with degrees in economics and psychology. He worked at an information services startup, FiscalNote, before joining blockchain security startup CertiK. That’s where he realized how people interested in crypto were paying high rates for loans, and saw an opportunity to launch Seashell.
Hok said with inflation rates rising — now at 7%, the largest increase since 1982 — this is an opportune time for something like Seashell, with bank interest rates sitting below 1%.
“Smart savers should strongly consider using Seashell as a simple solution to beat rising prices,” Cuban said in a statement.
The HQ: Hok, who grew up in Southern California, relocated to Seattle from New York City during the pandemic. He wanted to be on the West Coast but didn’t want to own a car (so, not Los Angeles) and wanted to avoid the Bay Area.
He’s been impressed by the engineering talent available in the Seattle region, which also has a budding fintech budding fintech scene. “It does rain a lot, people weren’t joking about that,” Hok said. But he added: “The views are beautiful.”