San Francisco-based bitcoin startup Wyre has raised $5.8m in new funding.
The Series A round, which coincides with the stealth startup’s official launch, was led by Chinese venture firm Amphora Capital. Other investors include Chinese payments firms Baofoo.com and 9fBank, Draper Associates and Digital Currency Group. Wyre said it has raised $7.5m to date.
The startup’s main focus is cross-border payments, with a particular emphasis on those sent between China and the US. Wyre uses bitcoin (as well as other blockchains like ethereum and litecoin, among others) to settle transactions, acting as an intermediary between businesses in both countries. Among those firms is NihaoPay, a China-based eCommerce payments firm that plugs into services such as WechatPay and Alipay.
The startup, according to founder and CEO Michael Dunworth, is looking to capitalize on interest in money exchange between the two countries.
As such, today’s launch opens up the service to prospective customers in the US and China. Some of the newly-raised funds, he explained, will be used to support the launch of services in Europe and Latin America as well.
Wyre is far from alone in using the tech as a remittance rail, as other startups in the bitcoin space have been pursuing the same concept in different parts of the world – a process that hasn't been without its own complications. Larger financial firms, too, have been testing cross-border payments using the tech.
According to Dunworth, Wyre hopes to gain traction through simplifying the process by which businesses can tap bitcoin for use in cross-border payments without actually handling digital currencies themselves.
Dunworth told CoinDesk:
“We take all the headache away from learning about the blockchain. Hey, you want to move money? Use our API, it’s all over blockchain technology as opposed to correspondent banks. We do it all on the public blockchain, it’s all basically through bitcoin.”
Today’s launch brings a 10-month private beta to a close, which has seen companies in China using the startup’s service to move funds. Wyre says that it’s also currently working with several companies in Brazil on another private beta, with an eye to expand into that region in the future.
Some of the firms that have already been working with the startup say the concept holds promise, prompting companies like 9fBank to invest.
“We believe Wyre’s cross-border technology will revolutionize global payment and remittance and have since made a sizable investment into the company,” Sam Lin, who serves as CFO for 9fBank, said in a statement.
For now, according to Dunworth, the immediate steps ahead involve expanding the size of its engineering and business development teams.
“A lot of the money is going to be used for scaling our engineering team. Right now we’re at 10, we want to be at 30,” he said.
But just as important, he said, is work on building out the mechanisms by which it moves money between China and the US.
Dunworth told CoinDesk:
“We want to be very focused. When we do it, we want to make sure we’ve got a very solid set of processes from a compliance standpoint and a technical standpoint.”
Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Wyre.
Image via Shutterstock
This article has been updated for clarity.