Circle Raises $50 Million With Goldman Sachs Support
Bitcoin financial services startup Circle Internet Financial has closed a $50m funding round.
The Boston-based company drew support from Goldman Sachs and China-based IDG Capital Partners, as well as all of Circle’s pool of existing investors, including Breyer Capital, General Catalyst Partners and Accel Partners.
Tom Jessop, managing director at Goldman Sachs’ Principal Strategic Investments Group, said the bank recognizes the need to invest in companies that "have the promise to transform global markets through technical innovation.”
“We think that Circle’s product vision and exceptional management team present a compelling opportunity in the digital payments space.”
Quan Zhou, managing director of IDG Capital Partners and Circle board member, said that China in particular will be a major focus for the company as it looks to further internationalize its services.
“We are very excited about our investment and look forward to helping launch the company in the Chinese market where consumer adoption of innovative digital payment products is growing at a tremendous rate," he said.
Circle has also announced the launch of new account features that enable customers to hold, send and receive US dollars. Those funds, according to the company, will be insured by the Federal Deposit Insurance Corporation.
The news follows reports from earlier this week that Circle was looking to raise as much as $40m in new funding.
New feature outlined
The company’s new account features mean users can hold their funds in both bitcoin and USD.
Customers who choose to hold their funds in dollars rather than bitcoin can still make payments to people or merchants who accept bitcoin. At the time of payment, Circle will instantly convert funds from dollars into bitcoin.
Also, customers can accept bitcoin payments and Circle will convert the funds instantly into dollars in their Circle accounts, if they wish. Those who prefer to keep their funds in bitcoin can do so, CEO Jeremy Allaire explained in a new interview.
“We’re putting forward this hybrid fiat-digital currency model, which gives users the benefits of digital currency – instant settlements, global interoperability, no fees and high levels of security – but without having to use a new currency,” Allaire said.
“This hybrid model allows customers to have all the benefits of digital currency, without the risks.”
Allaire went on to explain that a user can add dollars to his or her Circle account for free by way of bank transfer, then when they want to pay another Circle user, they can do so in an instant, whether the payment is denominated in bitcoin or dollars.
The company is rolling out the USD features gradually, launching them on selected customer accounts and adding new ones each week.
Allaire said Circle’s next step is to add more currencies to the platform. He explained:
“We want to bring these benefits of bitcoin to all the major currencies in the world, including in the UK, Europe and in China.”
With these “global goals” in mind, Allaire said he believed Circle would benefit from significantly more capital and the addition of some new strategic investment partners, so he set out to raise some more funds.
“Having [Goldman Sachs and IDG Capital Partners] as strategic equity investors in the company is a big vote of confidence in Circle and in the opportunity presented by digital money,” Allaire concluded.
Dollars image via Shutterstock.
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