Breakout Trading Group Raises $4.5 Million in Seed Funding

Breakout Trading Group, a crypto proprietary trading firm, has raised $4.5 million in a seed funding round led by RockawayX. Other investors included Andrew Kang’s Mechanism Capital, Round13 Capital, C² Ventures, and IOBC Capital, as announced on Wednesday.

The startup began fundraising for its seed round in February and closed it earlier this month after an oversubscribed round, according to co-founder and CEO Alex Miningham. Breakout initially sought $3 million, but received $6 million in commitments and closed at $4.5 million.

This seed round consisted of a priced round with token warrants, though Miningham declined to comment on the valuation. RockawayX has taken a board seat at Breakout as part of this deal.

Miningham, a general partner at crypto venture capital firm Ascensive Assets, co-founded Breakout last year with Dylan Loomer (known as TraderMayne), who has around 500,000 followers. They spent approximately nine months developing the platform before its launch in November. Since then, Breakout has engaged over 4,000 unique traders who have collectively traded over $12 billion in total notional volume.

What is Breakout?

Breakout operates as an evaluation-based crypto proprietary trading firm. Traders can opt for one-step or two-step evaluation paths, with account sizes between $5,000 and $100,000.

In the one-step option, traders aim for a 10% gain, which can be achieved in one phase or trade. The drawdown rules here are stricter, imposing tighter limits on how much the account balance can decrease.

The two-step evaluation requires first a 5% gain, followed by 10% in the second stage, with wider drawdown rules offering more account balance flexibility. Successful traders can receive a funded account of up to $200,000 in notional funding.

Miningham stated that trading happens in a live market environment with notional funds, and upon passing evaluation, traders are eligible to receive 80-90% of funded account gains in payouts, after providing their crypto wallet address.

Breakout has integrated several prominent and liquid centralized crypto exchanges, focusing on providing optimal execution for USDT-margined perpetual contracts.

As part of its business model, Breakout charges traders a fee for evaluation programs and utilizes its own capital for discretionary proprietary trading, occasionally copying successful traders’ strategies. Its closest competitors include Crypto Fund Trader and BrightFunded.

Breakout’s Growth Plans

With the new funding, Breakout is set to expand into the Asia-Pacific and Latin America regions and attract more users via a global affiliate program.
Miningham mentioned targeting high-profile traders with substantial social media followings on platforms like YouTube, Twitter, and Instagram. Investment in the affiliate network is planned for 2024 and 2025, focusing on developing markets.

The firm is also looking to expand its team of over 20 employees, hiring across various roles, including finance, trading, customer service, and marketing in the next 12-18 months.

Managing Partner of RockawayX Viktor Fischer commented that there are approximately 35-50 million active crypto traders globally, many aspiring to implement sophisticated trading strategies but facing capital challenges. Breakout assists these traders through well-structured evaluation programs.

Regarding the potential launch of its own token for user rewards, Miningham mentioned that there are no current plans, but the situation could change depending on the regulatory landscape in the future, especially since investors have received token warrants.

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