Three Bitcoin Startups Pitch for Funding at Boost VC Demo Day

Daniel Cawrey
Feb 14, 2014 at 16:03 UTC
Updated Jun 23, 2014 at 12:18 UTC

Over 100 investors gathered in Menlo Park, California, on Tuesday night (11th February) for the Winter Demo Day organized by incubator Boost VC.

At the event, 17 hopeful startups were pitching their business ideas to the group in order to raise venture capital that would hopefully get the fledgling companies off to a flying start. Among the startups were three new companies with a focus on bitcoin, each with just five minutes to pitch their concept to the potential investors.

Before the demos, Boost founder Adam Draper made a short welcoming speech. He told the audience that the startups had been working hard to create a polished product or service. He joked: “They have not slept in the past few months.”

First in the hotseat was a startup with crowdsourced security as its bright idea.

CrowdCurity

“Everyday, websites are getting hacked,” said Jacob Hansen, one of the co-founders of the startup CrowdCurity, before going on to explain how his team can help that problem go away.

Hansen proposed a concept of “99designs meets IT security” – a reference to the design crowdsourcing site that allows customers to buy logos and graphic art. The IT consulting sector is an expensive business proposition for websites, he went on, and this is especially true for those on a tight budget.

CrowdCurity has crowdsourced a group of security professionals, who on request will examine the application layer of a website for bugs that could be exploited by hackers.

CrowdCurity co-founder Jacob Hansen making his pitch.

CrowdCurity co-founder Jacob Hansen making his pitch.

The current system could be more efficient at turning up security flaws if it provided bug-hunters with a reward incentive, Hansen explained, instead of paying a security consultant for dedicated time seeking out potential weaknesses – as many websites currently have to do.

The idea is to “deliver crowdsourced security as a service,” he continued. The company already has over 20 clients and has signed up over 700 security researchers to the startup’s ‘crowd’.

It’s noteworthy that half of the company’s current business is coming from bitcoin-related clients, representing the gamut of wallets, exchanges and other cryptocoin-focused startups.

Hansen says CrowdCurity wants to “disrupt IT security and end the time of paying expensive security consultants”.

Coincove

Second to pitch at the Demo Day was Tomas Alvarez, a co-founder of startup Coincove. Alvarez said that his company wants to become “the Coinbase of Mexico” and eventually all of Latin America. He told the investors: “Bitcoin adoption is skyrocketing in Mexico and Latin America.”

Being a bitcoin exchange is a change of direction for Coincove. When CoinDesk covered the company a few months back, the plan was to help people send money around the world on the cheap by first exchanging it for bitcoin.

Coincove

Now it seems the founders have shifted from being a remittance provider to becoming a Latin American cryptocurrency exchange. This may not be such a bad idea, since that company had been focusing on Argentina, which, since it recently devalued its peso, has seen an increase in instability. Perhaps bitcoin will take a boost in the aftermath.

Coincove has a relationship with a bank in Mexico and has registered as a money transmitter in the country. The company will be accepting bank wires, as well as cash deposits, in over 10,000 locations within Mexico.

The startup has also conducting a private beta over the past week or so to test out its platform. The plan is to start as a bitcoin exchange for Mexico, and later to grow into the entire Latin American market.

SnapCard

The third and final bitcoin startup to pitch was retail platform SnapCard, which started its presentation with co-founder Michael Dunworth saying that currently: “Spending your bitcoin sucks!”

That’s why SnapCard has built a special bookmarklet – a kind of web browser plugin that provides extra functionality – which allows people to spend bitcoin with online retailers that don’t currently accept the cryptocurrency.

Snapcard

The SnapCard plugin does the clever stuff at the shopping cart stage of the sale: accepting bitcoin from customers who want to buy, say, a book on Amazon, and paying that retailer in the equivalent amount of fiat currency.

The company has set an ambitious goal to get its ‘pay with SnapCard’ functions on 10,000 merchant sites within the next 18 months. SnapCard is projecting $4.1 million in annualized sales, which could be a value proposition for merchants choosing to work with the company.

With its large volume of sales, SnapCard possesses valuable data about what bitcoin holders like to buy online – information that could prove important for the company’s retailer partnerships.

Bigger ticket items like cars are also becoming a popular way for SnapCard to help people spend their coin, and the company’s tax payment service is another option for enthusiasts to spend their bitcoin. More features are on the way soon, according to SnapCard’s founders.

Providing a Boost 

On the back of the programs for the Demo Day, Boost provided investors with a brief explanation of bitcoin and how it works:

Boost VC is based in San Mateo, California – smack-bang in the middle of Silicon Valley. It provides funding, housing and office space for its startups all on the same downtown city block.  The company has now accelerated a total of 10 bitcoin companies – the previous class had seven.

Applications for its next class of startups is currently closed, but interested startups should sign up for the incubator’s mailing list for when the cycle starts again.

San Francisco Image via Shutterstock