In the dog-eat-dog world of cryptocurrency exchanges, smaller startups that don’t attract the volume of megaliths like Binance, Coinbase and Kraken must band together to survive turbulent market cycles.

The Swedish cryptocurrency exchange Safello, founded in 2013, is one such startup. According to CEO Frank Schuil, the company went from processing roughly 500 orders a month in August 2018 to 14,000 monthly orders in October 2019 by partnering with a variety of wallets, including BlueWallet and Edge, as well as the bitcoin-friendly browser Opera. This included a widget that let European users with a bank identity number bypass the lengthy onboarding process.

“We want to do one thing really well, which is to take away the hard parts of our market. Right now we’re basically an on- and off-ramp,” Schuil said. “We want to expand on hyperlocalization to help us and our partners see better conversion rates.”

Likewise, Edge founder Paul Puey said the industry reminds him of Internet Service Providers (ISPs) in the ‘90s. He said he expects a shakeout in 2020, as more companies succumb to market volatility and risky business models. He expects exchanges to become more akin to infrastructure providers for mass users, rather than front-end products.

“Some of the early companies that had the most visibility were literally the ISPs,” he said. “But they suffered from a few common challenges, like [exchanges] today. They were super regional. They couldn’t scale globally. They had a heavy regulatory burden.”

Edge, a San Diego-based startup originally found in 2013 as Airbitz, has partnered with the incumbent Israeli exchange Bits of Gold, the lightning-friendly brokerage Moonpay and several other startups. From the users’ perspective, they may not even need to create an exchange account or enter personal information for small purchases, depending on the jurisdiction. Puey is one of the rare Californian entrepreneurs who has paid his staff in bitcoin for years, now encompassing a team of 12.

Both Edge and Safello have each raised nearly $3 million in venture capital so far and opted not to seek larger raises like Coinbase did during the 2017-2018 market cycle.

“If we want to build the best business we can be, we need to learn how to be profitable in a bear market,” Schuil said.

BlueWallet co-founder Nuno Coelho agreed, adding: “Our point of view is that the ecosystem is still too early to try to go too big. There’s still a lot of infrastructure that needs to be built.”

Coelho said his wallet startup noticed an increased percentage of downloads from European bitcoiners since integrating with Safello this autumn. Meanwhile, his team is already busy working on an integration with BTCPay Server, an open source payment processing project, and a partnership with Hodl Hodl.

From Puey’s point of view, such startup models allow teams to build out a “broader product” despite limited engineering resources. According to their founders, both Edge and Safello were profitable in 2019. BlueWallet, a much younger company, is bootstrapping and currently seeking its first funding round.