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Korean Bitcoin Startup Korbit Nets $3 Million in Series A Funding

(@southtopia) | Published on August 26, 2014 at 01:09 BST

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Korbit has announced a $3m Series A funding round, led by Softbank Ventures Korea.

The round included Pantera Capital and BAM Ventures, as well as investors and funds previously associated with the company: Barry Silbert's Bitcoin Opportunity Corp, Tim Draper, Pietro Dova and Strong Ventures.

The first bitcoin to Korean won exchange, Korbit had previously received a seed funding round of $400,000 in January, which brought its funding total at the time to $600,000 in angel investing overall. Although it offers an English-language version of its website, Korbit's services are targeted at the Korean domestic market.

CEO Tony Lyu told CoinDesk that Korbit intends to reinvest the extra funding to improve the quality of the company's products and services.

Lyu said:

"Our product line spans multiple areas – bitcoin wallet, exchange and merchant processor – and it takes considerable resources to deliver enterprise-grade performance and integration."

Korbit will also seek to acquire new talent with the capital.

Venture capitalists praise bitcoin, Korea

SoftBank Ventures Korea partner Kangjoon Ryan Lee expressed optimism in his comments, speaking positively about both bitcoin and its advantages over current payment networks.

Lee framed bitcoin as a solution to the high costs imposed by financial intermediaries, saying:

"Bitcoin provides big advantages in terms of cost savings and ease of use compared to traditional currencies and credit cards. I expect bitcoin to create meaningful markets in payments and international remittance. Going forward, bitcoin can play a role in wider variety of industries, for example enabling machine-to-machine transactions or acting as a platform for smart contracts."

Pantera Capital CEO Dan Morehead expressed the reasons for his company's interest in Korbit and Korea in a statement, citing the fact that South Korea has historically been an early adopter of digital goods.

Morehead said:

“The government supports innovation and even the banking foundation is invested in Korbit. Pantera Capital is excited about the investment in Korbit and confident that bitcoin will thrive in Korea because of its early adoption of innovative technologies and abundance of technical talent.”

Korbit gains traction in Korea

Korbit offers a bitcoin wallet, merchant payment processing service and a bitcoin exchange. In March, it launched a cryptographic proof-of-reserves system called BitTrust, via which users can register to verify their account balances are stored as claimed.

The company says it has signed up 25,000 individual users to its consumer services, and more than 400 merchants to the business-oriented Korbit Pay. The company's clients include offline merchants such as Nescafe (coffee) in Gangnam and Natuur (ice cream) in Pangyo, while its online merchants include Hanintel (lodging reservation) and News Peppermint (news translation).

South Korea has a relatively small but growing bitcoin user community, driven mainly by online payment services that aim to satisfy the country's large young population of online shoppers and gamers.

The country's two largest bitcoin companies, Korbit and Coinplug, are engaged in healthy competition to bring a number of sophisticated bitcoin services to market, including mobile apps, merchant software and an ATM.

Images via Korbit

AsiaKorbitSouth Korea

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