Social analytics and trading platform LunarCrush announced today that it raised $5 million in Series A funding, bringing the valuation of the firm to $30 million.
"It's about building quality, long-lasting solid business, and not overextending yourself," LunarCrush co-founder and CEO Joe Vezzani told Decrypt in an interview. "So, we hit an inflection point, where we wanted to start scaling up the team."
LunarCrush's Series A raise was led by Draper Round Table and Ince Capital. Other investors joining in the round included Draper Associates, WWVentures, TRGC, Bitcoin Frontier Fund, Draper Goren Holm, Blockchain Founders Fund, Side Door Ventures, MoonPay, EMURGO, LBANK Labs, FUNFAIR Ventures, and Techstars.
Launched in 2019, LunarCrush uses API and machine learning to pull data from the internet and social media sites, including Twitter, into a single dashboard and gauge online sentiment. Recently, LunarCrush expanded beyond cryptocurrency to include NFT and stock analysis.
Vezzani says artificial intelligence and its potential impact on Web3 is of particular interest to the team at LunarCrush as they look for new ways to leverage the technology.
"We've used machine learning and AI from the start," Vezzani said. "We use things like Google TensorFlow and OpenAI's ChatGPT and trained [the AI] on different social media posts that came in for sentiment, from bullish to bearish, focused on financials."
In crypto and stock trading, sentiment is gauged by investors being bullish or bearish on an asset or the market. "Bullish" refers to optimism that an investment will increase in value, leading to a positive outlook. Conversely, "bearish" implies a pessimistic view, anticipation of a price decrease, and a negative outlook.
A hurdle Vezzani said LunarCrush had to overcome with training AI models for cryptocurrency and NFTs was that the AI did not understand Web3 lingo.
"If you posted, 'I got wrecked on Dogecoin today,' and you spelled it REKT; the natural language processing library doesn't spell wrecked that way," he said. "So we had to train our system to understand that was a negative sentiment."
Vezzani says the new funds will go towards building up the LunarCrush team and expanding the scope of its analytic operations and user experience.
"We're always trying to utilize the best technology available to us and serve the end user with a better experience than what is currently out there," Vezzani said.