Bitcoin reputation startup Bonafide has elected to cease operations and commence liquidation less than one year after raising $850,000 from investors including Blockchain Capital and Quest Venture Partners.
According to an email sent to shareholders and obtained by CoinDesk, Bonafide had been approached by a “leading” bitcoin company for possible acquisition, however, the sale was declined as it was deemed "only beneficial to team members", not investors.
Founded in 2013, the startup offered an API that provided reputation data to bitcoin firms offering exchange, wallet and other consumer services.
In the email, co-founders Karthik Balasubramanian and Brian Moyer stated their belief that the movement of investor interest away from consumer-facing applications for the technology was also a factor.
Balasubramanian and Moyer wrote:
"While investment and activity continues to occur it is focused on private and alternate chains rather than bitcoin or other public chains where Bonafide operates."
As a result, the co-founders said they saw "little chance" that they would be able to generate revenue, pivot their product or secure additional funding.
Moyer told CoinDesk that continued declines in consumer bitcoin spending were a prevailing factor in the shut down, and why the founding team won’t be rushing to start another project.
"We don’t want to be consultants. We got a lot of traction, but it hasn’t grown. There’s just no movement in the bitcoin space. Because of our backgrounds, we could probably raise money doing something different, but they’re all long plays," he said.
Moyer indicated that the founding team had been working without salaries since as far back as April, and that it explored possibly pivoting to the bitcoin compliance sector as well.
As for what’s next for the team, Moyer was less clear, adding only:
"We're still going to be watching [bitcoin] really close."
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