Started From The Bottom - from nobody to unicorn in 3 years
We recently announced that we’ve raised a $69 420 000 Series B at a unicorn valuation. We started from the bottom in the fringe industry of crypto as two first-time founders when we created Dune out of Oslo, Norway in 2018. Now we’re here: a unicorn company at only 16 employees merely 3 years later. Here’s the story of our fundraising journey.
Raised March 2019
Round size: $250 000
Fundraising time: 7 months
Team size: 2 founders
This was by far the hardest round for us to raise. We started Dune with less than a handful of connections in the crypto space. We knew from the get-go that we would not find any potential customers nor investors understanding what we were up to in Norway.
We initially focused on cleaning up Ethereum data and getting our first customer before spending time fundraising. Only two weeks into Dune’s existence we flew to ETH Berlin and started pitching our idea of product metric dashboards; “Mixpanel for crypto”. We ended up signing Dharma as our first customer only 3 months later. 1st of December we shipped them cleaned up Ethereum data and they paid us $600/month for it. That was a huge win as hardly anyone had a paying customer in the nascent crypto space at the time.
The photo up top is Mats and me celebrating getting our first customer with some IPA and chess.
Full of hope with our paying customer and not having had a paycheck for a few months, I started focusing on fundraising late in the autumn and assumed we’d be able to pull together a pre-seed round by the end of the year. Absolutely not. Fundraising was brutal. At the time traditional venture funds could not care less about crypto and there were probably less than ten serious crypto funds. By Christmas we’d hustled our way to around 50 conversations, but we were not even close to getting a term sheet.
The main pushback was that the addressable market for crypto tooling was ridiculously small and that there was not any business to be made in crypto data because it was all open. Going into Christmas 2018 it was becoming clear that we’d probably not be funded anytime soon. Being broke, having no salary and getting nos or non-replies 10 times a day is hard.
Over Christmas we thought long and hard about the pushback we got. Part of our thesis for starting Dune was that Ethereum and crypto represent a new and more meaningful financial infrastructure that’s perfect for builders. We deeply believed that and basically disregarded all market size concerns from investors - pivoting to selling trading data to suits was not an option.
On the openness of the data however, we did see the critique of selling access to dashboards B2B maybe not being too powerful with the underlying data being open. We had two paying customers at this point, and that was our only traction. We decided to put those deals at risk and made the hard decision to pivot to a free and open community product.
We realized that the powerful play here would be to embrace and accelerate the openness of the data, instead of selling a closed dashboarding product resembling web 2 data products.
With our new direction fundraising was still far from a home run. We spent another two months getting no’s and non-replies, and probably had another 50+ conversations that went nowhere. Luckily, when we were standing at the very edge and close to having to get another job, Teck at Binance was impressed by us actually having revenue and accepted us into their accelerator program.
ETH Denver 2019, a couple of weeks from having to give up this Dune thing due to lack of funding.
After the acceptance, I remember getting on the phone with Mats and simply laying down on the floor in joy and relief that we’d finally secured Dune’s continued existence. The following $4 000 paycheck was the best payroll of my life, after 7 months of no salary.
I think there is an interesting lesson to be learned from this: both disregard and embrace VC pushback. Keep your conviction and don’t get discouraged from a 100 investor no’s, but also take pushback seriously, and rigorously assess your beliefs. We essentially disregarded all market size concerns and stuck to our first principles conviction that crypto is a more meaningful financial infrastructure where there will be plenty of builders to serve. On the other hand we also took pushback to heart and adjusted our plans accordingly, embracing the openness of crypto data instead of working against it by selling closed dashboards.
Raised August 2020
Round size: $2 000 000
Fundraising time: 15 months
Team size: 2 founders
At the end of the Binance Accelerator in spring 2019 there was a pitch day in SF where everyone tried to raise a seed round. If I remember correctly, one or two out of the 10 companies in the batch managed to raise a seed round. We certainly did not.
We went back home to Oslo, kept our burn rate minimal, and didn't hire anyone. Mats and I had an annual salary of $50 000 and kept at it. Building the product, backfilling missing data, talking to users, tweeting out dashboards, going to hackathons, sharing a room in shitty hotels (and I’m a heavy snorer - sorry, Mats!), doing support, got on calls with users to help them learn SQL, and: trying to do a seed round.
For the next year we did four serious attempts at raising a seed round, with no luck. We had $30k ARR and a growing user base including many top projects in the space. Nevertheless, most investors still didn’t believe in the crypto opportunity, and especially not the data part of it. We went to SF in February 2020 and simply could not raise a $1M seed round. In hindsight it is pretty absurd that someone could have gotten ~10% of Dune for $1M less than two years ago, but not a single investor in Silicon Valley was interested.
Mats and me pitching Dune in Palo Alto February 2020 trying to raise $1M. Went home with zero term sheets.
Dune was born and raised in a bear market. Finally, in summer 2020, that bear market was coming to an end. It was “DeFi Summer” and Dune was a key destination for keeping track of all the humble yield farming, staking rewards and YAM insanity. We did $60k ARR and were growing our key metrics about 5% weekly.
On our fifth attempt at a seed round 15 months after the accelerator pitch day we finally got somewhere. Getting the round together was still not easy, and we had to apply some serious hustle. No one wanted to lead the round so we ended up pricing it ourselves. It was certainly a stressful couple of weeks. We weren’t sure if it would happen this time either, but eventually we managed to get the raise done. We were finally ready to take Dune to the next level with what felt like a shit-ton of money: $2M.
Raised May 2021
Round size: $8 000 000
Team size: 6
Fundraising time: 1 week
At the end of 2020 the v1 of our app, a fork of the open source analytics tool Redash, was falling apart as we had scaled to a few thousand users. Redash was a great MVP for us but the query execution queue was in the thousands, the app was slow and clunky, we had no proper public user profiles and so on and so forth. Something needed to be done. After over 2 years as a two man army, with no and low salaries, we finally had the money to hire a few more teammates. In Q1 2021 the four-person Dune-team with two founders and our first hires Wilhelm and Vegard (+ a consultant) took on an insanely ambitious project: rebuilding the Dune application from the ground up.
We had no idea how long it would take us, but it was undoubtedly a massive endeavor. Thousands of queries, user flows and visualizations needed to be supported. After an intense effort we shipped Dune v2 on the 18th of March - we delivered faster and better than we could have dared to hope for. A small and dedicated team can take something from 0 to 100, real quick.
By late April we were feeling good, crypto had continued to grow, and we had hired a couple of more team members bringing our total team size to 6 people. For a couple of months we had also started seeing something we were not used to: investors pinging us. They had been seeing Dune charts across crypto-Twitter and wanted to chat. While we felt like the seed round was just done, we realized there was a real opportunity at hand here.
In late April we said fuck it and decided to go for a Series A raise. Mats and I made the decision on a Friday. I turned around and asked the VCs I knew if they would have a chat the week after. Over the weekend I put together a deck and started circulating before the calls. I remember saying to my girlfriend “I’m not sure I can do that long weekend ski trip in a month, as I will probably be fundraising then.”
However, things had changed, we were suddenly hot. On the following Tuesday we got two term sheets: one at valuation we considered decent, and then one at twice the valuation - it was bonkers! From there things escalated like crazy. Partners that said they could only speak to us in a month could speak on 30 minutes notice. The FOMO was on and Mats and I pitched partners baaaack to baack for 12-14 hours a day through Wednesday and Thursday. By the end of the week we had a handful of term sheets and could probably had a fair amount more.
A walk in the park deciding on term sheets
10PM Friday, one week after we decided to raise, we signed a term sheet with our dream partner USV for a $8M round. It was the most intense and exhausting week of my life and we were totally overwhelmed by suddenly being “hot” to VCs, but it was certainly better than the 2 years of no’s and no-replies. Tables turn, live and learn.
Raised November 2021
Round size: $69 420 000
Team size: 16
Fundraising time: 0 days
Fast forward 6 months after the Series A. Crypto kept getting hotter and more mainstream, NFTs blew up and you could track OpenSea volumes on Dune among a ton of other things. We kept growing our key metric 30% month/month. From August to September it grew a mindboggeling 175% month/month - all organic with zero marketing spend. We had grown the team to 16 people.
Now in stark contrast from two years earlier all tech investors wanted their crypto play and they were certainly seeing Dune charts everywhere. After the Series A experience we were not too wooed by investors wanting to chat anymore and I turned down a handful of investor requests daily. At the end of the day it’s all about building product, community and team, so that’s what we kept doing.
However, some time in October, Coatue managed to slip through the tight “no VCs filter” and I had a 30 minute chat with them. They were clearly impressed with Dune, displayed a deep understanding of what we’re up to and wanted us to let them know if we were fundraising. I told them we are not fundraising.
We didn’t chat for a few weeks, and then they pinged me and said they had undertaken a due diligence of us outside-in. That was of course interesting and we got on a quick call where they showed me a 40 slides deck with a ton of customer interviews and insights about our market opportunity. It was all looking good and they said just let us know if you are fundraising. Again, I said “cool, but we’re not fundraising”.
A couple of weeks later I got pinged again and they wanted to do a 10 minute call. At this point I was experienced enough to understand what that meant: a preemptive term sheet. I took the call and sure enough: they wanted to invest $50M at $500M - a very solid markup from our Series A half a year earlier. They also showed me some really really impressive data that they track, which gave them strong conviction on what we’re up to from the outside-in.
In this call I also realized they were based on the West Coast, not New York as I thought. They were taking calls at 5AM to meet my suggested European time slots. Knowing their location I said I’d be happy to take the calls later in the evening, but they simply replied “we’ll work your time zone, no worries”.
We were however still very much not fundraising, so I told them they would basically have to give us an offer we simply couldn’t refuse, and said “make it a billion and we’ll see”. They told me they would have to circle up internally, but that it didn’t sound entirely undoable.
And now you know where this is going: two days later they come back with a term sheet at, boom, $1B. An offer we couldn’t refuse. And with that we had landed a unicorn round. What a time to be alive. Oh, and for the memes we made the total round size $69 420 000, yolo.
Ah shit, here we go again. Over some good coffee we decided to say fuck it, and go for the Series B.
Getting funding for building Dune has been one hell of a ride with a lot of serious struggles and some amazing moments of joy. Interestingly, funding size and time spent fundraising has basically inversely correlated. If you’re building a startup remember that things can change quickly, you can grind for a long long time, with little or no progress, but when you hit it things can go absurdly fast. Just over 3 years ago we started from the bottom - now we’re here.
Back to building til it's over, but it's far from over... so we are hiring!
If these tracks have been playing in your head while reading this: bingo! Congrats on winning the Drizzy pop quizzy.
Started from the Bottom (duh)