Bitcoin API developer Gem has announced the completion of a $2m seed funding round led by First Round Capital and Tekton Ventures.
The firm's first major investment round was also supported by RRE Ventures, Mesa+, Amplify.LA, Idealab, Baroda Ventures, Crypto Currency Partners, QED Associates, Bitcoin Shop Inc and angel investor James Joaquin.
The California-based startup says the money will help accelerate growth of its new API, which was announced earlier this month at TechCrunch Disrupt San Francisco.
With the investment news, Gem also announced the appointment of former PayPal executive Ken Miller as its new chief operating officer.
Poised as a 'game changer'
Howard Morgan, partner at First Round Capital, said the company feels that Gem is positioned to become a leader as bitcoin disrupts the banking and payments industries.
“Gem’s approach to the bitcoin world, building a previously non-existent security platform for developers and others to integrate into any solution, was game-changing to us for the industry,” said Morgan.
RRE Ventures co-founder Jim Robinson described Gem’s API as the sort of disruptive innovation that has been lacking in the payments industry for a long time.
“This is a team with strong security chops building key bitcoin infrastructure,” he said.
Gem CEO Micah Winkelspecht explained that there is more to the deal than mere funding:
“Each investor has contributed not just their capital and vast network access, but also deep strategic advice. With this funding, our team is well-positioned to continue building the world’s most highly scalable and security-focused API, and continue to add key talent to the team.”
Winkelspecht said there are currently over 16,500 bitcoin apps in development on GitHub and the company’s goal is to help developers focus on their overall product rather than the underlying bitcoin protocol, cryptography and security.
Built for speed
Taking these aspects of bitcoin app development out of the equation should streamline the process, speeding up development and cutting costs.
Winkelspecht said the company is excited to receive this early stage funding, as it will help the firm become the all-in-one platform for bitcoin app development. He added that Gem enjoys “tremendous backing” from bitcoin developers.
“The potential for an all-in-one bitcoin development platform and the rise of new and exciting bitcoin apps opens the door to new, innovative ways of managing not only bitcoin funds securely, but eventually any digital asset, and that was a technical and financial services revolution I wanted to help drive,” said Ken Miller, the company’s newly appointed COO.
Miller stressed that the future of the bitcoin ecosystem depends on developers and said he believes Gem will be key to that process:
“Gem’s platform will allow them to drive mainstream user adoption of Bitcoin with the next generation of great apps, using a highly secure solution from us that requires literally less than 10 lines of code. It’s going to change the game.”
Competition in API segment intensifies
Development on the bitcoin API front has intensified in recent months and three solutions are now vying for the title of bitcoin’s premier API.
Chain announced that it is developing a bitcoin API earlier this year. The startup said its goal was to eliminate the “heavy lifting” for bitcoin app developers by offering a comprehensive API that would reduce the amount of effort and resources needed for app development.
So far, the company has managed to raise $13.7m in funding and it is backed by investors such as Barry Silbert, Pantera Capital and Homebrew.
CEX.io joined the bitcoin API race this week, with the announcement of its free PlugChain API, which is currently in beta. The team told CoinDesk that the current version was developed in a matter of weeks.