Accel-backed Crypto Investment Startup Pillow to Shut Down Operations Citing Regulatory Uncertainties
- ByStartupStory | June 23, 2023
In a recent announcement, crypto investment startup Pillow, backed by Accel, informed its users that it will be closing down its operations on July 31. The decision to cease services was attributed to regulatory uncertainties and a challenging business environment. The move comes just eight months after Pillow raised $18 million in a Series A funding round.
In a note to users Pillow expressed regret over discontinuing its current services through the Pillow app due to regulatory uncertainty. The startup stated, “We regret to inform you that the Pillow team has made the decision to no longer provide our current services through the Pillow app due to regulatory uncertainty and will be closing operations on July 31.”
As a result of the shutdown, users’ funds will no longer earn interest, and the rewards section of the app will become inaccessible. Pillow assured users that they would receive a consolidated statement of all their transactions on the Pillow app on or before August 7, 2023.
Crypto withdrawals will be permitted until July 31, while bank withdrawals will remain available until July 7.
Founded in 2021 by Arindam Roy, Rajath KM, and Kartik Mishra, Pillow boasts a user base of over 75,000 individuals across 60 countries. Through its app, users had the ability to invest and save in US dollar-backed stablecoins, as well as popular cryptocurrencies like Bitcoin and Ethereum.
Pillow had previously secured significant funding, raising $18 million in a Series A round in October 2022. The funding round was co-led by Accel, Quona Capital, Jump Capital, and existing investor Elevation Capital. In an earlier seed round in February 2022, the startup received $3 million, led by Elevation Capital.
The Morning Context in India was the first to report this development, while an African news website had previously stated that Pillow was discontinuing its services in Nigeria and Ghana, just a year after entering those markets.
Pillow’s decision to shut down follows the closure of another Indian decentralized finance (DeFi) app, Flint, backed by Sequoia Capital and Coinbase, which halted its operations in January due to regulatory concerns.
This move by Pillow further emphasizes the challenges faced by crypto startups in navigating regulatory frameworks and the impact it can have on their operations.
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