If you like my work, reach out - @711_Joseph
Hi All,
I believe crypto is the future.
I believe transparency, creativity and digitisation are net positive and will help the average person level the playing field in access and opportunity.
From finance to gaming to healthcare, I believe that blockchain-based technology will become ubiquitous across society.
The first step on this journey is a wallet. Introducing Argent.
Here’s my first full-on research piece.
Chapters:
Platform Overview
Mechanisms and Features
Problem - Crypto is HARD
Limitations
Revenue Generation
Team + Leadership
Industry Observations
Partnership With zkSync
Road Map
Investors / Recent Raise
Investment Thesis - Argent Series C
Competition Analysis - Metamask
Risks
Valuation
Series C Approach:
Conclusion
+++ Disclaimer +++
As usual, these are all my own thoughts and are not financial advice.
+++ Disclaimer +++
“For crypto to live up to its potential, it needs to break the stranglehold of big exchanges and incumbent wallets. The experience is too scary, expensive, and insecure for most people.” - Itamar Lesuisse, Co-Founder & CEO of Argent
1. Platform Overview
Argent is a mobile app-based cryptocurrency “smart” wallet. Based on Ethereum, it enables users to self custody their crypto assets - competing with exchanges such as Coinbase and Binance. Argent offers neobank-esque capabilities in a crypto-focused way. It is accessible on both iOS and Android as a mobile app.
The Argent Wallet is operated by London (UK) based Argent Labs Limited. To date, Argent is not regulated by the FCA in the UK or any other regulator anywhere in the world.
Today, Argent offers three wallets - Argent zkSync, Argent Vault and Argent X. It launched as a mobile-only app offering the Argent Vault before adding the Argent zkSync wallet to the app. Argent X is a recently launched web-based wallet built on Starknet.
Crucially, all wallets offer non-custodial crypto asset management. 300+ different coins are tradable on Argent Vault while 44 coins are tradable on the zkSync wallet. Similarly, users can connect to their favourite DEX/aggregator and use Argent to trade there.
^ Screenshot of the wallet selector (within the Argent App). Shows Argent zkSync and the Argent Vault.
Founded in 2017 | 25+ Employees | Tagline: The gateway to your digital future | 231k Twitter followers
Mission Statement: Empower everyone to control and prosper from their digital assets and identity
Argent zkSync
This is the main Argent user wallet built on zkSync, a Layer 2 (L2) network built on Ethereum. It is available on the mobile app. The wallet enables users to buy crypto (fiat → crypto), trade crypto (crypto → crypto) and earn interest via defi integrations. These activities are all settled on the Ethereum blockchain.
Trading is facilitated on ZigZag. Defi applications include: leading USDC/DAI on AAVE or securing yield via Yearn’s USDC/DAI/WBTC strategies. Users can also invest in index tokens.
Currently, zkSync does not support smart contracts. This will be introduced with the upcoming launch of zkSync 2.0 later this year. ZkSync will have its own virtual machine, ‘Zinc,’ and it will come with a compiler (a program that translates a programming language into another) for EVM compatibility. This will bring guardians and other Argent vault features to L2.
As of March 2022, Argent zkSync has 500,000+ users.
Argent zkSync is available for both iOS and Android.
Argent Vault
While Argent launched as an Ethereum-based app, the team quickly realised the issue of high gas fees (initially subsidised by the company!). This wallet is now the Argent Vault. It also sits on a user’s mobile. While the private key sits on the phone (locked cryptographically and unviewable), the app connects to a smart contract wallet (SCW) - more on this later.
Users can also buy and trade crypto from the Vault wallet. Its defi-integrations include AAVE, LIDO, Balancer, and Yearn (screenshot from the app below).
^Defi-page from the Argent Vault wallet
Argent X
Finally, this is a web browser wallet built using Starknet. It is available using Chrome and Firefox plugins but for now, it’s mainly a developer tool. It has recently passed 200k downloads. The wallet is still being developed as StarkNet is still in its ‘Alpha’ phase.
Argent mobile and Argent X use different networks hence assets cannot be sent between wallets.
+++
N.B.: In all their wallets, the wallet UI, and more importantly UX looks clean - see below.
2. Mechanisms and Features
Argent currently supports Ethereum (Layer 1), zkSync (Layer 2), and StarkNet (Layer 2). Via Argent Vault, Argent zkSync and Argent X respectively. Do not send funds to other chains - you will lose your $$$.
Smart Contract Wallets
As aforementioned, the Argent Vault uses “smart contract wallets” (SCW) delivered via a mobile app. In other words, the Ethereum account sits on the mobile device while the ETH, ERC20, ERC721 and ERC1155 tokens are stored in a separate smart contract. The user’s mobile holds their private key while the SCW holds their funds.
This means that the SCW is programmable, passwords are recoverable, it’s lockable and upgradable - all are done via multicall. This also enables features such as auto-blocking transactions, creating a ‘trusted list’, setting a daily transaction limit and causing all transactions using this wallet to require ‘guardian’ approval.
Its use of “guardians” removes the need for users to memorize/protect a 24-word seed phrase - the typical experience with other crypto wallets.
Security - Guardians
Guardians are a select group of other Ethereum accounts or SCW elected by the user. They have permission to execute select operations on their wallet. The most pertinent of these include - locking (up to 5 days), unlocking and triggering a password recovery process on the user’s wallet.
While these guardians can be added when the account is open, subsequent additions/removals take 36hrs to confirm - allowing a window for malicious actions to be resolved. Password recoveries take 48hrs to be finalised.
Fiat On-Ramp
Users can buy cryptocurrencies directly from the app with a debit card or a bank transfer. The company has partnered with Ramp and MoonPay for fiat-to-crypto transactions. Fiat payments from the US are settled via Wyre (debit card only). All three have transaction limits, some with KYC-gated limits.
Wallet Funding Alternatives
Users can also fund their Argent zkSync accounts via centralised exchanges using LayerSwap. There’s an obvious choice here.
Trading
Argent allows cryptocurrency trading via Parawap (Argent Vault) and ZigZag (Argent zkSync).
Using ZigZato to get the best price, users’ trades are automatically routed across 10 of the major decentralized exchanges - Uniswap, Kyber, Curve, 0x, Balancer, Oasis, Bancor and Paraswap. During routing, live rates, network fees and slippage are all considered. Users’ trades can be split across exchanges to improve pricing. The routing mechanism also allows for multipath settlement - i.e. rather than ETH → USDC, ETH → USDT → USDC for example.
Argent Vault offers 350+ tokens via Parawap. Argent zkSync offers 44 coins via the ZigZag platform ($0.5 flat fee per trade)
Other Notable Points
Leveraging the Ethereum naming service, Argent offers users an “argent.xyz” - i.e. Joseph.argent.xyz.
Argent’s technology implaments: AWS, Google Analytics, Amplitude, Branch, SendGrid, Customer.io, Zendesk, Twilio, Mezmo, Datadog, Snowflake, Moonpay, Ramp, Stripe, Coinbase, Wyre, Segment and Firebase
Infura and Alchemy are its main node providers
Argent’s code has been audited - link - and they offer a bug bounty program of up to $50k - link
Session Keys allow you to pre-approve an application’s transactions according to a set of rules, like time, gas usage, set transaction volumes of a token(s), or particular functions on specific contracts
Argent has their own NFT gallery - this presents as a web page when users type their Argent username into a browser.
Summary
3. Problem - Crypto is HARD
Crypto is currently too complex and hard for the average person to get into and not blow up. Product market fit with Argent is still a while away but they are well on their way.
Source - Can you tell that I am loving the new GOT - House of Dragon?
The Problem:
Private keys storage
Users risk losing everything if they lose their seed phrase or its compromised
People are left with pieces of paper safeguarding $$$$
Lack of gas fees understanding
Gas fees above $5 (let alone $1) are exclusionary and will stop the global onboarding of crypto users - fees should approach $0.1…
Often inaccessible without a technical background
The majority of crypto requires a significant understanding of complex platforms
Repeated contract signing builds in dangerous user habits without due diligence of what they are signing
Mistakes are unforgiving - from mis-signing to using incorrect addresses
Enter Argent
Argent takes on each of these problems. They do not give users access to their seed phrases and instead use social password recovery. They are building on ZkSync and Starknet - both promising avenues for transactions that are executed for cents. Simple UI/UX and a trusted list of defi platforms and wallet address materially reduce the risk of mistakes. The [Name].Argent.eth ENS functionality increases easy use further with human-readable addresses.
Argent apps are familiar and strike similar tones to revolut, Venmo and neobanks. Their apps follow Jakob’s law - users transfer expectations they have built around similar products/experiences, hence new platforms should relate to these.
Similarly, Argent offers trad-fi like security. Daily transfer limits, guardians approval ahead of approving large transfers, fraud monitoring and locking accounts are commonplace in trad-fi; arguably expected by users.
The amalgamation of these features creates a simple and intuitive wallet experience - even for new users.
Today you can use Argent with any desktop Dapp that supports Wallet Connect
Super App?
The integration of defi apps like lending platforms is the first step on a roadmap that imagines Argent as a crypto “super-app”. More on this later
For now, Argent isn’t pulling its punches:
Argent Does Not Generate Fees For:
For the avoidance of doubt, Argent does NOT profit from gas fees. Interestingly, Argent paid for users’ gas fees at the start of the company to help bootstrap growth.
Argent also does not generate fees from fiat-to-crypto purchases. These fees go to third-party providers.
They also do not generate revenue from defi-applications - fees found here - link
4. Limitations
It is not all smooth sailing. There are several obstacles in Argent’s way:
Smart Contracts / Interoperability
Much of Argent’s promise comes from its smart contract led philosophy. From a mobile perspective, the zkSync is the lead wallet. It currently has a limited/no smart contracts basis; key features available in the Argent Vault are therefore not available in Argent zkSync. This will change with zkSync 2.0.
Fundamentally, upon using password recovery - available thanks to smart contract wallets - users generate a new private key/account. Current concepts of soul-bound tokens do not work in such an ecosystem.
Technological Throttles
Each wallet has a throttling limitation. For instance, At peak usage of zkSync, the withdrawal time is about 10 minutes but during times of lower use, it may be a 7hr wait.
Due to its smart wallet features, Argent Vault uses more gas than other web-based browsers like MetaMask (though the use of multicall limits this).
Argent X is built using starknet a very new technology. Users can all but expect network outages and teething issues.
Due to the wallets being based on Ethereum - they cannot directly store BTC and other major crypto assets (Litecoin, Binance Coin, and Tezos). However, users can store Wrapped Bitcoin (WBTC) - an ERC-20 token fully collateralized by a reserve of Bitcoin. Friction remains.
Also, there is currently no desktop interface. The platform does not support other layer 1s/2s like BNB or Avalance or Polygon. That said, their reasoning for this is clear.
5. Revenue generation
Argent only generates revenue from crypto-to-crypto trading. Trades conducted through Paraswap, a Crypto Exchange aggregator, charge an exchange fee of 0.5% of the value of the transaction. This is split 85:15 between Argent and Paraswap. Effectively, having a take-home exchange rate of 0.425%. Argent is yet to confirm if the profit from users’ use of Zigzag. This compares to Metamask’s 0.85% for aggregating token swaps.
The Argent team plan on broadening its model to include subscriptions for premium services. The “super app” goal will help.
6. Leadership + Team
Argent is headquartered in London but the team works remotely across Europe.
Founders:
CEO - Itamar Lesuisse - Linkedin
Itamar is the former CEO and founder of Peak, a mobile cognitive training service with 50m+ users. It was acquired by Lagardere in 2016
He was previously at Visa, Amazon and BCG
Itamar holds four payments-related patents
MS Computer Science & Electrical Engineering
CTO - Gerald Goldstein - Linkedin
Gerald is the former CTO and founder of Peak
PhD in Nuclear Physics
CSO - Julien Niset - Linkedin
Founded SQR Technologies, a quantum information startup
Holds three patents related to his PhD in quantum information and quantum cryptography
“Chief Science Officer”
Clearly, this is a highly technical team with real experience as entrepreneurs.
Coupling Itamar and Gerald’s experience leading Peak with Julien’s expertise in cryptography, Argent is well placed to understand and drive adoption in the consumer mobile crypto space.
Team:
Argent has a c.40-person strong team (confirmed by Argent).
12 Engineering / Data Science: Laurent E, Craig W, Sergio G, Miguel A, Hedi K, Dhruv K, Olivier V, Andrey K, Roberto A, David R, Kamil D, Michael B
3 Product Design: Justin G, Graeme B,
3 Talent: Waleed S, Yasmeen O, Julia C
2 Product Management: Ismael D, Ko S
2 Marketing: Chad W, Edward W
1 Strategy & Operations: Matthew W
1 Growth: Adam P
4 Other: Sam H (General Counsel), Alexandra B, Anastasiia V, David R
Argent has recently hired Chad West, an early employee and Director of Global Marketing at Revolut and Ismael Darwish, product Lead for Argent X.
7. Industry Observations
As crypto continues to move away from ideas/whitepapers to a thriving ecosystem, we are still in the early stages of the blockchain-enabled future. Despite that, the uptake of crypto and its platforms have grown at breakneck speeds. In spite of recent disruptions, most metrics are x10 - x100 from just 1-2 years ago.
Retail adoption progresses at a rate faster than that of internet users. Recent reports suggest that crypto will reach 1 billion users in 2030.
Source - BCG, Bitget, Foresight Ventures
Crypto captures mind-share at a mind-blowing rate. This is set to continue.
While other layer 1 blockchains seem to capture more users…
…demand for Ethereum blows the others out of the water.
Source - 27/08/2022
Solana’s lower gas fees (vs. Ethereum) reflects in its comparatively larger # of transactions…
Source: Nansen (data pulled manually - ouch!). Layer 2 transactions include Polygon, Optimism and Arbitrum transactions #
… but zkSync creates offers fees that are c.50% lower than its peer L2s (Arbitrum and Optimism)
Source: L2 Beat
8. Partnership With zkSync
zkSync is a layer 2 (L2) scaling solution built on Ethereum. Argent launched their zkSync wallet following the boom in Ethereum gas prices. Thus, users benefit from low transaction costs on the L2, faster transaction confirmations and security based on Ethereum’s main chain.
ZkSync is built by Matter Labs and has a $200m war chest. zkSync uses zero knowledge rollups. Rollups process transactions off-chain and compile them into a smaller transaction that is finalised on Layer 1. A zero-knowledge transaction is one whereby the receiver/verifier can prove X is true without seeing other information.
Users sign transactions and submit them to validators
Validators roll up thousands of transactions together in a single block
Each group of transactions are processed through a prover generating a SNARK - think of this as a long receipt listing/confirming the valid transactions but more information here
The SNARK is then sent to a smart contract on Layer 1 and verified
Other examples of zero knowledge rollups are Loopring and Starkware.
Matter Labs received funding from both the Ethereum Foundation and investors including Union Square Ventures, 1kx and Dragonfly.
ZkSync is currently the 6th largest L2 by total value locked (TVL) - c.1% of the market TVL across layer 2s and 0.1% of all TVL across crypto. L2s have a market share of c.9% across all of crypto. The majority of these assets on zkSync are ETH, USDC, USDT and DAI - source.
Source - L2 Beat
It is still early days for zkSync. Transactions are typically c.20k a day with usage spikes - to date there have been c.11.5m transactions on zkSync, with c.500k transactions within the last month alone.
Similarly, zkSync sees strong growth in user numbers. There have been c.360k unique depositors (ETH) to date with c.20k unique depositors this month.
As users grow, we can expect the TVL of the L2 to grow significantly.
+++
Argent opted to build on zkSync as (i) it is Ethereum based meaning it can leverage its finality and security, (ii) its an open and permissionless platform - thereby excluding Loopring - (iii)it enables rapid withdraws - excluding Optimism and Arbitrum.
zkSync recently announced that version 2.0 will be live from Oct-22. This will bring smart contracts to L2 and thus introduce Argent vault’s features - such as guardians and password recovery - to the Argent zkSync wallet.
Source - Twitter | Offical List here
While other L2s like Arbitrum and Optimism have higher TVL and larger market share, crucially neither use zero-knowledge proofs. Argent is well placed to capitalise as zkSync approaches TVL and usability like its larger peers.
Vitalik agrees - Source
ZkSync’s TVL would be x44 and x27 should it match Arbitum’s and Optimism’s TVL respectively.
Source - L2 Beat
Key Partnership 2: Starknet - there is limited available information/data on Argent X to date. More information is here.
9. Road Map
Argent actively explores new features and verticals and has touted NFTs, virtual real estate, gaming, and DAO-related features to be on the roadmap.
Having spent hours reading through their discord and listening back to live streams, the following items seem to be on their road map:
Improve the fiat on-ramp process via a global on-ramp.
Users will be able to add funds via more platforms and perhaps an argent first platform. The latter allows Argent to keep more of the transaction fees while lowering the fee for the users - “We are targeting cents (fees) not dollars”
N.B. this was very subtlely suggested but I think it’s a key way for Argent to increase revenues
Transaction review
Users can gain more insight into what they are signing
Further developed user pages - where people can display their NFTs, buy crypto with fiat, and much more in the future
Dapp store - a place for people to learn about Dapps and interact with them
Gaming - This has been long attempted by others; I look forward to what the team launch
Note - the Argent team does not plan to support sidechains in the near future
Following their recent raise, they flagged the Latin American market as a key growth hub + they will base operations out of Mexico.
Road to 1 Million / Billion Users
Everything considered Argent has great features, bells and whistles. Even the layman can use Argent. That said, other than lending and de-fi products, there are not many actual uses for the app. “My dad/mom could use Argent, but they have no reason to.”
The next stage of Argent’s growth, and mass adoption, is to provide value to different groups of users. From crypto super users, gamers, and eventually cash payments at retail stores. It is impossible to go after all of these users at once.
With all the current infrastructure in place, Argent can now push on to be a super app with many use cases.
10. Investors / Recent Raise
To date, Argent has raised $56m via 3 rounds:
Seed 1 - Jan-18 - $4m raised from 7 investors
Investors: Index Ventures, Hummingbird Ventures, Firstminiute Capital, Creandum, KR1 and Mattias Ljungman (partner at Atomico)
Series A - Mar-20 - $12m (£9.2m) raised from 5 investors
Led by: Paradigm
Other investors: Index Ventures, Hummingbird Ventures, Firstminiute Capital, Creandum and Robert Leshner (Founder of Compound - defi protocol)
Team Size: 17 people | Average wallet size: $2,000
Series B - Apr-22 - $40m (£32m) raised from 7 investors
Led by: Fabric Ventures and Metaplanet (Skype co-founder Jaan Tallinn’s VC firm)
Joined by existing investors: Paradigm, Index Ventures, and Creandum
New Strategic investors: Starkware, Jump Capital and Animoca Brands
500,000 users
I speculate that the latest valuation range was between $200m - $500m. More on my thoughts on this later…
Argent has earmarked proceeds from the raise that will be used to build out Argent’s legal, finance and treasury management teams. Funds will also be used to build the company’s efforts in Latin America.
11. Investment Thesis - Argent Series C
Crypto is still in its infancy and despite the progress today, there is still a long way to go. On this voyage, everyone should be able to control and protect their digital assets. The experience should be simple, futuristic but forgiving, user-friendly and beautiful. A sticky crypto wallet solves this. The belief/support of crypto is the belief/support of a go-to crypto wallet.
Argent is in a unique position to benefit from four pertinent tailwinds (i) there are still hundreds of millions (billions) of people to onboard to crypto (ii) such users will live using their wallets as online profiles with digital goods, (iii) the rise of zero-knowledge proofs on top of the Ethereum blockchain is a self proliferation that is ready to take-off, and (iv) the use of smart contract wallets enables neobank/trad-fi like user experiences while keeping the possibility of further functionality upgrades/use cases open, therefore enabling the possibility of a crypto super app future.
As friction, transaction costs, search costs and implementation costs go down, the crypto future that we predict will become a reality. The continued development of the Argent app is the technology driver required to continue to reduce costs and improve relationships across the crypto space. Uber and Airbnb are examples of this in their fields.
Argent creates economic value and social capital (long term) for its users. Novel use cases will come with time but lending platforms, NFT galleries and gaming activities are already a crucial part of crypto. Crucially, Argent’s user-friendly UI/UX - such as guardians - means users will no longer panic over a seed phrase.
As the platform grows, the benefits of easy money transfer/payments, online flexing and having digital fun with friends become increasingly commonplace. Therefore, further increasing economic value and social capital.
I currently do not predict a limiting second derivative of user growth - though Uber and Airbnb experienced this:
Uber: Taxis were priced out of some city areas. There is an upper limit on drivers: passengers ratio
Airbnb: City house prices/rents were being artificially increased. Too much supply in some areas may drive rental yields down
In Argent’s case, fundamentally, each user optimises for a safe place to store their crypto assets.
Current limitations in engineering talent stop competitors from copying Argent’s wallet infrastructure. Such a rebuild would be self-cannibalising for larger wallet players. Also, unique relationships with zkSync and Starknet are tough to duplicate.
Other tailwinds include the continued long-term growth in NFTs as brands/technology/legal players catch up, the remittance market increasing as globalisation and immigration are strained, and the dollarisation in 3rd world countries as populations move away from their own currency.
12. Competition Analysis - Metamask
There are many crypto wallets. From Metamask to Rainbow, Rabby to 0xFrame, users are spoilt for choice!
In the interest of time - I may flesh this out in another post - here I briefly share insights on the biggest competitor, Metamask.
MetaMask
Metamask is one of the OG wallets and is typically the wallet of choice for people leaving exchanges to own their keys. Metamask is a non-custodial web-based plugin and also offers a mobile app on Android and iOS devices. Metamask requires a seed phrase. Metamasks enables the use of a plethora of L1s and L2 - including BNB Blockchain, Avalanche, Polygon, and test networks. Users can use online crypto portals via their Metamask app (a very cool feature).
They also have an institutional offering.
Institutional offering ^
To date, Metamask has 30m users. As with all wallets, users can store their crypto assets, buy, send and swap tokens. Metamask charges 0.85%(!) for transactions (aggregator of prices). Hold onto your chairs…
While average daily swap sizes range <$10k across c.6.5k daily traders (c.0.22% of users), since the inception of the swap feature (Oct-20), Consensys, Metamask’s owners, have printed c.$420m+ in revenue. Their current estimated annualised revenue (last 30 days) is c.$64m! This is across 98k users (c.0.33% of total users) in the last month.
This echoes the earlier point of features not having to be used by everyone for them to be worthwhile.
Source: Dune Analytics
Source - Dune Analytics
Source - Dune Analytics
Metamask Valuation
Consensys operates a varied product suite. It is hard to isolate the valuation for Metamask.
Still, in Mar-22 Consensys raised a $450m Series D funding round at a $7bn+ valuation. This more than doubled their series C round in Nov-21 where they raised $200m.
It goes without saying that these are “hot period” valuations and new valuations are likely generously 50% down since...
Metrics to consider:
Valuation / Users = $93.3 per user. This assumes that Metamask is arbitrarily 40% of Consensys’s business.
Finger in the air x10 revenue multiple suggests a valuation of $600m for Metamask. I anticipate annualised revenue would be x2-x5 in the GO GO / hot period of 2021.
Other wallets include Rainbow Wallet, Rabby, Frame and XDEFI.
13. Risks
Smart Contract Risk - Argent’s use of smart contract wallets and its building on three different layers (Ethereum, zkSync and Starknet) means that there is significant smart contract risks
Zero-knowledge proofs - this technology is still very new and material outages, hacks and bugs may significantly hurt Argent and/or its users
Use Cases - much-hyped use cases simply may never materialise or Argent’s approach to building the wallet may stop them. For example, current concepts of soul-bounded tokens are not viable on Argent. Similarly, it may take longer than expected for such use cases to go mainstream, meaning Argent burns through its cash runway
Competition - there are many other wallets. For instance, Metamask has the most users and hence can naturally spread via word-of-mouth. As people are particularly sensitive about losing their hard-earned money, they may not opt for smaller contenders. Similarly, Metamask is backed by a well-funded company with an army of engineers
Legal challenges - legal challenges may cause Argent to close operations in certain jurisdictions. While the emergency kit can be used to rescue funds, this may cause material reputational damage and throttle new users joining.
14. Valuation:
N.B. I did not speak with Argent on the below. It is 100% my own thoughts.
Earlier I speculated that the post-money valuation for Argent was between $200m - $500m. I arrived here via (i) Return The Fund Analysis and (ii) using value per users metrics
Return The Fund Analysis
Fabric Ventures led the series B. Metaplanet did not have fund size data available. Fabric Ventures invested in Argent via their new growth fund. The fund is targetting $100m raised having recently hit its first close. It invests up to $10m in startups. I will assume that they invested $10m.
Fund Size / % owned at exit = Minimum Viable Exit
Fund Size = $100m
Raised in series B = $40m
Assume Argent valuation = $300m | thus 13% is sold to investors (makes sense)
Assume Fabric Ventures invests $10m
To return the fund, the exit valuation must be $3.0bn. We have seen Metamask’s owners @ $7bn - indeed markets have changed since - so this is on the higher side. Phantom, another crypto wallet also recently raised its series B - $109m at a $1.2bn valuation (1.8m users).
We can go further and sensitize the data. Below shows what the exit valuation of Argent must be to return a $100m fund vs venture capital investment amounts
Hence, assuming an exit valuation <$6bn and investing $10m from a $100m fund, the post-money valuation of Argent was likely $200m-$500m.
Value Per Users Metrics
Simply:
Metamask → ($7bn Valuation / 30 million users)*Assume Metamask is 40% of the business = $93.3 per user
Phantom → $1.2bn Valuation / 1.8m users = $667 per user
We can estimate Argent’s users as at least 700k as they don’t publicly share this
We sensitise this to get:
Therefore, we see that the $200m-$500m is not far off. Argent may have a high value per user. This is satisfactory as I anticipate there to be a levelling off in value per user as the total user base increases.
Ownership %
Argent has raised $56m to date. A valuation range of $200m-$500m means that they have sold 11%-28% of equity to date. This is plausible for a company that has just raised series B.
15. Series C Approach:
I would reach out directly to the leadership team offering a 30-minute call.
To prepare for the call, I would send $1,000 to my Argent wallet and just play (I did something similar for this blog!) All the while I would make notes on what the user experience was like and compare it to the other wallets that I have used. I would also share these thoughts with Argent and build a dune analytics board - more advanced than this. I would read through the Argent discord and make note of common problems and activity levels.
While their series B was not too long ago, I would reach out in case a process has started. if not I will take the call and follow up in 5 months with a preemptive term sheet - aided by outside-looking-in stats from Dune Analytics.
16. Conclusion
Well, writing that was great fun. Argent is a very interesting company and I will be watching its growth closely over the long term.
Thanks for reading.
God Bless,
Joseph 28th August 2022.
Questions for Argent:
Any update on the number of tradable tokens on Vault? 300+still?
Who are the 10 exchanges that you route trades through? Says only 8 here - https://www.argent.xyz/blog/the-best-way-to-trade/
Does Argent make revenue in any other ways?
Does Argent make revenue from zigzag?
What are the latest user metrics across the wallets?