Image: Mark Lennihan/Associated Press
There's a new leader in the Bitcoin startup space, at least in terms of funding.
BitPay, a bitcoin payment processor, announced Tuesday that it raised a $30 million Series A round of funding, bringing its total funding to date to $32.7 million. That makes BitPay the top venture funded bitcoin startup to date — a fact the company isn't shy about touting in its release.
"[We] have always felt that bitcoin needed investable companies if bitcoin and BitPay are going to succeed," Stephen Pair, cofounder and CEO of BitPay, told Mashable. That said, Pair says his startup didn't need a ton of capital nor did it set out to raise the biggest round in bitcoin history.
"It wasn't about being the biggest or the largest," he says. "It was about raising funds from investors who could do the kind of things for us we needed done."
Those investors included some impressive names. BitPay raised funds from Virgin Group founder Richard Branson, Yahoo cofounder Jerry Yang, Founders Fund, a VC firm started by PayPal cofounder and early Facebook investor Peter Thiel.
"Banking as we know it is in the midst of enormous change and innovation," said in a statement. "Bitpay has proven itself to process bitcoin safely and reliably, growing the market and increasing adoption, which continues to build trust, legitimacy and momentum in this exciting currency revolution."
BitPay works with around 30,000 businesses including Tiger Direct, Virgin Galactic and WordPress to help them accept bitcoin payments. The startup plans to use the latest funding round to hire another 70 staffers over the next year and focus on building its presence in North America, South American and Europe.
Bitcoin startup investments have been on the rise.
After bitcoin was created in 2009, some early adopters tried to bootstrap virtual currency companies with mixed results. As the price of bitcoin began to skyrocket and gain more media attention, a new crop of startups entered the space and attracted big name VCs.
Coinbase raised a $25 million round late last year led by Andreessen Horowitz to provide a digital wallet for bitcoin transactions. Circle raised more than $25 million over two rounds to make it easier for merchants to handle virtual currencies. Even the Winklevoss twins are trying to capitalize on the space with plans to launch a bitcoin exchange fund on the Nasdaq.
The price of bitcoin has fluctuated heavily in recent months after the failure of Mt. Gox and increased regulation in China. But Pair says interest among investors and professionals has remained stable even during this time period.
"We've been involved with bitcoin for over three years now. The attention tends to come in waves and then it dies down for a little while and then something notable happens again and suddenly the attention is back," he says. "I think investors are looking at this in the longterm in terms of what it can do for payments on the Internet."
BitPay is now valued at $160 million, according to multiple reports.