Circle Receives $17 Million Funding, Unveils Exchange and Wallet Service
Published on March 26, 2014 at 13:00 GMT
Circle Internet Financial has closed a $17m Series B funding round and announced the launch of its first consumer product.
The bitcoin company raised the $17m from various investors, including Breyer Capital, Accel Partners and General Catalyst Partners, bringing its total funding to date to $26m.
Investment was also received from Oak Investment Partners, Pantera Capital and the Bitcoin Opportunity Fund, which is run by Barry Silbert, founder and chief executive officer of SecondMarket and founder of the Bitcoin Investment Trust.
Leonard H. Schrank, the former chief executive officer of SWIFT (Society for Worldwide Interbank Financial Telecommunication) also invested, as did Circle board member M. Michele Burns and Fenway Summer, a consumer finance advisory and venture firm led by Circle board member Raj Date.
Jeremy Allaire, Circle founder, Chairman and CEO, said:
“We are thrilled to have such a strong showing of support and vote of confidence from world-class investors and strategic individuals as we move into the commercial phase of Circle."
He explained the funding will allow Circle to build its team, increasing roles across product, operations, legal, compliance, security and customer support. Allaire also has plans to open offices in a number of locations outside the US.
On top of this, the funds will be used to invest in the infrastructure required to provide a secure platform for the company's customers.
Up until now, Circle has been very secretive about what it has been working on and the products it aims to offer. Today, the company has launched its first consumer product, but only a limited number of people will be able to test it out at this stage.
Allaire revealed his company is offering something akin to a bitcoin exchange and wallet service, although he is loath to use those terms.
He said users will be able to use the service to convert their fiat currency into bitcoins, then take advantage of tools that make it easy to send, receive and spend funds.
The company's main aim is to open bitcoin up to a broader market and make it easier for the masses to get involved in digital currency. Circle wants to make sure the service it offers is perfect, though, before making it available to all.
"We are being very careful and deliberate in how we add users to our system, ensuring that it is a product that users value and recommend to their friends and family, and that, from an operational perspective, we are able to deliver an exceptional experience," said Allaire.
He explained that his company is building a global consumer financial service and institution that it wants consumers to trust with protecting and securing their digital assets. This is something Allaire claims the vast majority of bitcoin companies have failed to do:
"They've failed to meet consumer support expectations, they've failed to meet even rudimentary security and audit obligations, and so we believe that the bar needs to be high in terms of offering a consumer service around bringing bitcoin mainstream."
For this reason, Circle is being patient and is launching an invitation-only limited release this week.
Working with regulators
Allaire, who has founded two previous startups that both saw successful IPOs, said Circle hasn't so far faced any problems with regulators or banking partners. He puts this down to Circle's upfront approach.
"Unlike many first-generation bitcoin companies, we've been extremely engaged and transparent with regulators about our commercial and product plans," he explained.
He believes it is important for companies in the space to educate government and commercial banking partners about what they are doing, and also integrate any feedback and suggestions.
"We're all in this and learning together, and it's critical that industry participants look at government and the banking industry as partners in building the ecosystem for digital currency," Allaire added.
Circle isn't the only bitcoin company to announce investment this week. Yesterday, Kraken announced it had received $5m in Series-A funding, led by Hummingbird Ventures.
Kraken, which allows users to buy and sell bitcoin, namecoin, dogecoin and Ripple, among other digital currencies, is owned by Payward, Inc.
Other companies in the space are expected to make funding announcements this week, too.
Bitcoin image via Shutterstock
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