UPDATE (4th September 16:00 BST): A BitFury spokesperson has confirmed that this is the second investment by BitFury Capital.
BitFury Capital, the investment arm of bitcoin mining infrastructure provider BitFury, has announced an undisclosed investment in BitGo.
The news marks the venture capital firm’s second investment in recent weeks, following confirmation that it had invested in an anonymous bitcoin wallet provider.
Speaking to CoinDesk, BitGo CEO Will O’Brien elaborated on the significance of the deal, though he declined to offer any specifics.
Praising BitFury as a leader in the bitcoin mining sector, O’Brien told CoinDesk:
“BitFury is one of the largest companies in the bitcoin space and they’re looking to invest further in global entrepreneurship and really exciting companies in the space. To have the endorsement from your customer, saying they not only want to be a customer, but also want to be an investor, that’s a big deal.”
Although neither company disclosed the size of the investment, O’Brien did suggest that the sum was smaller than BitGo’s $2m seed funding round and $12m Series A.
“We don’t disclose investments unless they’re of a particular size and scale,” he said, adding that securing a valuable client relationship was more important than the capital raised.
In conjunction with the deal, BitFury announced it would use BitGo’s enterprise multi-signature platform for its treasury management needs.
BitFury is the company’s latest Platinum-tier customer. BitGo says it has witnessed a growing interest in both its product and enterprise financial management tools, which are tailored to the needs of the bitcoin industry.
BitFury CEO Valery Vavilov suggested that the company’s recent expansion was a key driver behind the deal, saying:
“As our business has been scaling rapidly, we were looking for efficient and secure bitcoin corporate treasury solutions that would satisfy our operational needs and meet our corporate governance and reporting standards.”
The CEO added that the company’s diversified operations offer unique management challenges, requiring the right operational tools and accounting transparency.
“This partnership with BitFury Group has the potential to grow and establish new standards for the industry,” O’Brien added.
Growing interest in multisig
O’Brien noted that BitGo is the only company to successfully deploy and commercialise multi-signature technology.
The CEO added that he has seen a lot of interest in BitGo’s Enterprise product since its launch in April. The attention is coming from a variety of clients, including financial services experts, hedge fund managers, investors, e-commerce clients and bitcoin miners, he said.
“At this point, we’ve had over 500 companies sign up for BitGo Enterprise, we’re in the process of enrolling and qualifying them right now. […] The reality is that people are realising that this is no longer a do-it-yourself industry.”
Many early players in bitcoin tried to develop their own security technology, often with lacklustre results, he added, concluding: “Much like VeriSign provided a brand for Internet security, BitGo is doing the same for bitcoin.”
The Bitcoin Foundation has been contacted for comment on this story but no response has been received at press time.
Images via BitGo and Shutterstock