BitPay Raises $30 Million in Record-Breaking Bitcoin Funding Round
Published on May 13, 2014 at 11:00 BST
Atlanta-based bitcoin merchant processor BitPay has officially raised $30m in Series A funding in the largest-ever financing round for a bitcoin company.
The round was led by Index Ventures, and included Yahoo founder Jerry Yang's AME Cloud Ventures, Felicis Ventures, PayPal founder Peter Thiel's Founders Fund, Horizons Ventures, RRE Ventures, Virgin Galactic's Sir Richard Branson and TTV Capital.
In an interview with CoinDesk, BitPay CEO Tony Gallippi framed the funding as both a validation of the explosive growth his company has seen over the past year and a way for BitPay to continue its success into 2015 and beyond.
For example, the company will aggressively expand its team, tripling its work force by adding 70 jobs across its global offices.
"We have to continue to make our product more scalable," said Gallippi. "What works for 1,000 merchants does not work for 100,000 merchants. We’ve got to continue to add new features to the platform, we’ve got to continue to build things that our merchants are asking for."
BitPay's $30m round comes amid an increasingly active year for bitcoin startups. Fellow merchant processor and consumer bitcoin wallet provider Coinbase raised $25m in December, while wallet and secure storage platform Xapo secured $20m in March.
BitPay previously raised $2m in funding as part of a seed round led by Founders Fund in May 2013.
One of the chief goals of the funding, Gallippi said, will be for BitPay to strengthen its commitment to furthering bitcoin adoption abroad.
Gallippi noted that one of the reasons it chose to work with Index Ventures was the firm's worldwide reach given its offices in Geneva, London and San Francisco, saying:
"When we look at our product, clearly it's a global product. We're starting to get some traction in Europe – I'd say Europe is about 30% of our business right now – and we felt that it's going to be really important to add more strategic investors in Europe."
The BitPay CEO said the appeal of Index Ventures extended to its startup funding approach, adding: "We really felt they were the kind of investors that were going to roll up their sleeves and help us, and that's why we ultimately chose them."
Growing the team
Another noteworthy development is that BitPay is seeking to dramatically expand its team. Gallippi noted that here, too, BitPay plans to operate strategically by adding experience where it's most needed – on its developer team:
"It all revolves around software development: back end, front end, tools for our internal staff to use. Of the 70 jobs, maybe 40 to 50 of them are going to be software developers."
The next biggest area for growth, he continued, will be on its international sales team.
"We now have a head of business development in Latin America," he said. "We've got a head of business development in Europe, and we're going to be looking to add more resources to North America, South America and Europe to build our business and acquire more merchants."
Opportunity for investors
Gardiner Garrard, co-Founder and managing partner at TTV Capital, told CoinDesk that his firm's investment marks its first foray into the digital currency ecosystem.
However, Garrard is confident in BitPay given what he stressed was the proven effectiveness of the company's underlying business model, saying:
"We are a believer long-term in the prospect and potential of bitcoin, and we think BitPay has the best model for having success of that ecosystem by enabling the people who are going to benefit the most from having access to this form of currency."
This validation is notable as Garrard said that his firm is still evaluating bitcoin, and that he believes it will serve as an addition to the payments ecosystem rather than a replacement for some time.
Founded in May 2011, BitPay quickly expanded to become the largest merchant bitcoin payment processor, growing its network to more than 30,000 merchants currently.
However, the company has also added additional services. This February, the company released Bitcore, an open-source project for developers, while also making improvements to its QR code technology in a bid to reduce friction at the checkout.
To Gallippi, the funding is a validation of the work his team has done over the last 12 months. Comparing his company now to its state one year ago, he said:
"[Last May], we had maybe 4,000 merchants. Today, we have over 40,000, so we're 10 times bigger from an overall customer perspective. When you look at the transactions we're processing, our volumes are about 10 times what they were last year."
He added that, given the opportunity available in the bitcoin market, he'd like to achieve similar growth by next May.
Disclaimer: CoinDesk founder Shakil Khan is an investor in BitPay.
Image via BitPay
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