Digital Currency Exchange ShapeShift Raises $10.4 Million Series A

Digital currency exchange startup ShapeShift has closed a new funding round, one which it hopes will fuel a suite of new products.

Mar 29, 2017 at 5:48 a.m. UTC
Updated Sep 11, 2021 at 1:11 p.m. UTC

CoinDesk - Unknown

Digital currency exchange startup ShapeShift has closed a $10.4m Series A.

Led by Berlin-based Earlybird Venture Capital, the round included participation from Lakestar, Blockchain Capital, Pantera Capital and Access Venture Partners, the firm said today. Existing ShapeShift backers, including FundersClub, Digital Currency Group and Erik Voorhees (the company’s founder and CEO) also took part in the round.

The fresh capital will be used to expand the exchange's engineering team, a move that would come ahead of two exchange-related products set to be released later this year.

In interview, Voorhees said that many of those hires would come on the engineering side, both in preparation of those launches as well as an anticipate rise in volume. According to ShapeShift, platform growth has averaged 48% per month in the last three years, seeing an average monthly trade volume of about 50,000 bitcoins spread across 40 digital currencies and assets.

Although tight-lipped about the exact nature of future ShapeShift products, Voorhees indicated that both were new types of exchange, one built entirely around smart contracts.

More broadly, Voorhees spoke to the exchange's clear vision of the potential diversity of cryptocurrency tokens, which was less well understood by the industry in 2014.

He told CoinDesk:

"What we saw when we started was that tokens were going to become a widespread phenomenon. We believed there would be blockchain tokens representing all sorts of value beyond currency, and that's become increasingly true, which is why ShapeShift's frictionless exchange is important."

Voorhees also said that ShapeShift's policy of not holding any customer assets or other details helped to give confidence that the effect of any hacks or other breaches would be minimal.

"We take consumer protection to a new level by not endangering them in the first place," he said. "In the hack we suffered a year ago, it was the first exchange hack where customers weren't at risk either in funds or personal information."

The funding coincides with a broader uptick in interest for alternative cryptocurrencies, with this market experiencing a recent boom some suggest is a sign it is developing into a new asset class.

Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in ShapeShift. 

Image via Shutterstock

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