An Offer You Can’t Refuse: Bitcoin Startup BitPay Raises $2M Led By Founders Fund (The VC Run By The PayPal Mafia)

Posted: May 16, 2013 in eCommerce, Enterprise, Europe, Funding & Exits, GT, Social
Tags: , , ,

BitPay, the startup with ambitions to become the
PayPal of the bitcoin world, is today announcing that
it has raised another $2 million. And in a kind of
poetic justice, the round is led by none other than the
Founders Fund, the VC started by what’s commonly
called the PayPayl Mafia. The Atlanta-based startup says that it was not
planning to raise any money at the moment — it
announced an initial raise of $510,000 only in
January. That was its first outside funding after being
bootstrapped internally. However, the company also
says that it couldn’t say no, considering who was asking: “We were not looking to raise any capital until later
this year, but we could not ignore the opportunity to
have Founders Fund involved with BitPay,” Tony
Gallippi, co-founder and CEO of BitPay, notes in a
news release on the deal. “There’s no single
investment firm we would rather have on our team right now than Founders Fund.” Nevertheless, it looks like the extra money will be
used for hiring: there are currently two jobs open for
node.js developers “who are excited about bitcoin.”
BitPay is also looking for a UX designer. There will
also be more investment in its platform and further
product development. Founders Fund partners know a thing or two about
payment platforms — given their past experience as
founders and senior execs at PayPal and other
companies. Their interest in BitPay comes from the
fact that it, and bitcoin, in general, appear to be
growing like wildfire. “BitPay’s ambitions have been global from the outset,
and at Founders Fund we have been impressed with
the company’s tremendous growth as they sign up
hundreds of new customers a day, turning the
potential for opportunity into a reality,” said Brian
Singerman, a Partner at Founders Fund, in a statement. When we covered the company’s first raise in
January, we noted it had already signed up 2,100
businesses that were using its platform to process
bitcoin payments. In April, it added nearly that many
again: 1,900 merchants, and they are now processing
$5 million per month in bitcoin transactions covering areas like electronics, precious metals, “and other
low-margin products.” The promise of using bitcoin
over dollars is lower fees, and companies are seeing
“a large increase in profitability by accepting bitcoin
payments,” the company notes. In addition to Founders Fund, Max Keiser’s fund
Heisenberg Capital, a London-based fund focused on
bitcoin companies, is also involved in this seed
round. It comes as a number of other VCs are also
jumping into the bitcoin landgrab. The terms of this most recent round were not
disclosed, the company notes, “although 100% of the
existing seed shareholders exercised their pro rata
rights to maintain their ownership percentage in
BitPay.” Previous investors in BitPay included Shakil
Khan (the Path and Spotify former head of special projects, who has also launched his own bitcoin
information resource, Coindesk), Barry Silbert, Jimmy
Furland and Roger Ver.

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