Why Pillow thinks digital assets will free up emerging markets

Pillow aims to be more than just another platform that provides access to crypto investments. The Singaporean start-up, which today announces the successful completion of an $18 million Series A financing round, is on a mission to tackle financial exclusion in emerging markets around the world.

“We want to be a holistic home for digital, asset-driven financial services,” explains Arindam Roy, CEO and co-founder of Pillow. “We will enable users to earn, save, spend and invest all from the same platform with an easy-to-understand, cohesive user experience from a single mobile-first interface.”

Right now, what Pillow offers its community of 75,000 users in 60 countries is more limited. They can use the app to buy and manage a range of digital currencies, including Bitcoin and Ethereum, as well as US dollar-denominated stablecoins, and to quickly and easily switch between assets. Pillow also offers an investment management solution designed to mitigate risk and generate income.

But even this functionality offers many investors a way to save and invest for the future that they don’t currently have, Roy emphasizes. For most people in many of the emerging markets it serves, access to conventional asset classes is very limited – especially when it comes to international assets that can offer some protection from the turbulence of their home economy. This is one of the reasons why the demand for digital assets is growing so rapidly in many developing countries.

“We founded Pillow because we realized that people knew why they wanted to invest in digital assets, but not how,” Roy adds. The app therefore provides them with an easy route to do just that, as well as a range of educational content to help users make more informed decisions. “We aim to create an educated class of investors,” Roy added.

In the long term, however, the ambition is broader. The same frustrations that drive many people to save and invest digital assets apply to other areas of their personal finances, Roy points out. The inefficiency and ineffectiveness of financial systems in many emerging markets leaves people without basic financial services and vulnerable to economic uncertainty.

“Ultimately, the real potential of digital currency is that it can allow you to escape the conventional financial system,” Roy says. “If we can find ways to tokenize real-world assets and make it easier for people to pass through and spend their digital currencies, we can give people the choice not to use their traditional financial systems.”

To get to that point, Pillow needs to add some new services to the savings and investment functionality the app already offers. It will also have to build trust and understanding, Roy admits. His own experience, growing up in India, appears to be decisive. “It took my grandparents’ generation 50 years to learn to trust banks in India, and until then they had to keep money under the mattress,” he says. “We want to help today’s generation become familiar with digital assets much faster.”

The company’s rapid growth suggests that many people share Pillow’s ambitions. Currently free, the app’s user base has grown by 300% since the start of the year and assets under management have increased fivefold. The company has launched in major markets in recent months, including Nigeria, Ghana and Vietnam.

Ultimately, Roy expects it will take three to five years to build Pillow into the all-encompassing app he wants to offer. But today’s fundraising will help accelerate the journey.

The round is led by Accel and Quona Capital, alongside investors Elevation Capital and Jump Capital, and builds on Pillow’s $3 million starting round a year ago. The company does not need capital so much, says Roy, but the support of investors with experience and understanding of digital assets, emerging markets and the consumer market. “We wanted support from people with the expertise to point us in the right direction,” he says.

Quona managing partner Ganesh Rengaswamy will certainly address the company’s vision. “Money without borders, without permission has the power to change lives, especially in emerging markets, and it can bring more people into financial systems,” he says. “What Pillow is building could remove the friction of formal financial systems for the underprivileged while engaging users in savings and investment behavior.”