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Top Bitcoin VCs Back Coinapult's $775k Funding Round

(@pete_rizzo_) | Published on October 1, 2014 at 00:32 GMT

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Coinapult has raised $775,000 in funding from a group of notable investors and investment firms, including Barry Silbert's Bitcoin Opportunity Corp, angel investor Roger Ver and technology-focused VC firm FirstMark Capital.

The Panama-based bitcoin wallet service provider raised the capital through two rounds of funding, and aims to use the money for additional marketing and product improvements.

Speaking to CoinDesk, Coinapult CFO and COO Justin Blincoe indicated that the biggest benefit for his company will be the expertise of its now-solidified investor group, which he characterized as essential to his company's success in an increasingly crowded bitcoin wallet market.

Blincoe told CoinDesk:

"The reality of the bitcoin landscape is there are a lot of wallets. It's not difficult to come out with a wallet, it's difficult to have a very good wallet and that's what will separate the wheat from the chaff."

Lawrence Lenihan, founder and managing director at FirstMark Capital, a VC firm whose past investments include Lumosity, Pinterest and Shopify, was optimistic about Coinapult and its long-term prospects in light of these challenges.

Lenihan, who serves on the board of directors at SecondMarket, told CoinDesk:

"These are the best of the technologists and tinkerers in the bitcoin world, so it was a no-brainer to be able to take a stake in them."

Coinapult co-founders Erik Voorhees and Ira Miller also contributed to the round, a development that Blincoe said was meant to help the entrepreneurs solidify their equity positions in the company.

New Payza partnership

Blincoe told CoinDesk that its recently announced bitcoin price volatility solution LOCKS will be the focal point as the company seeks to increase its global user base.

Introduced in July, LOCKS allows Coinapult customers outside the US to peg the value of bitcoin to the price of gold, silver, US dollars or any other asset, thereby locking in their value should bitcoin's price rise or fall.

Blincoe noted that Coinapult will seek to capitalize on the biggest value-add to LOCKS, its ability to integrate with the offerings of other bitcoin companies.

"The message is we can integrate with almost any company out there that wants to offer LOCKS. Yes, we have a wallet, yes we're looking to improve it, but for all the other wallet companies out there we can work with them and allow their customers access to this product, which I think is kind of exciting," Blincoe said.

As part of the funding news, Coinapult announced a partnership with online payment processor Payza that will allow its customers in 190 countries the ability to access LOCKS without leaving their Payza accounts.

The US market question

Despite the company's growing user base, the introduction of LOCKS comes at a time when the bitcoin industry is increasingly looking to create solutions that can help shield consumers from bitcoin's price swings.

As such, the possibility remains that Coinapult could lose out on the US market, should another competitor aim to introduce a similar solution.

Blincoe, however, is not worried about this development, suggesting that the US market, while potentially boosting the company's short-term enrollment, would not be a key driver of its long-term market strategy.

"Our strategic planning is that the US isn't going to be the biggest hotbed of bitcoin use in the future. It will be countries and regions that really benefit from bitcoin over the financial services that are offered to them today," Blincoe concluded.

Images via Coinapult; Shutterstock

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