Top Venture Capital Deals of Bitcoin

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It seems as though every Bitcoin conversation eventually comes back to the recent price decline of the cryptocurrency and its supposed imminent collapse into irrelevance. This, of course, is a fairly shallow conversation based on only the most visible indicator of the currency’s health — not the most relevant. The price of Bitcoin does fluctuate, and may experience multi-year declines, just like any other currency.

 

But it is not fair or academically responsible to make wide ranging conclusions based off of a single indicator. To better triangulate the status of Bitcoin’s health, consider the other relevant factors: new Bitcoin adopters, companies that are using the currency, and perhaps most importantly, how much funding Bitcoin companies are receiving.

 

You can look elsewhere for information about new users and companies. This article is set out to paint a picture of just how much money is pouring into Bitcoin from investors.

Why is investor interest an important indicator? There are two reasons. First, investment groups do exhaustive research into the companies they put their money behind. You can be sure that in that process they didn’t forget to look at the Bitcoin currency as a whole. However exciting the business model, an investment group isn’t going to put up cash for any company in an industry that is sinking. Secondly, money talks. Money makes news. Money turns heads and builds momentum. An industry that receives substantial investor attention is one that has both passed intense scrutiny and also possesses large financial upside.

 

The following list of major investments in Bitcoin companies over the last year shine some light on just how lucrative the industry really is. In total, nearly $800 million have been invested in Bitcoin companies in the last calendar year — these are the highlights:

 

itBit. This company sets itself apart by working closely with government financial regulators to verify the legitimacy of their operations.

Investors: RRE Ventures, Liberty City Ventures, Jay W Jordan II, James Pallotta.
Investment: $25 million, 7 May 2015.

 

Cryex. Typified by its financial industry gravitas, Cryex boasts executive leadership from major banks and transaction companies, cutting edge technology, and some very reputable investors.

Investors: White Star Capital, Northzone Ventures.
Investment: $10 million, 7 May 2015.

 

Circle Internet Financial. Circle is very focused on making cryptocurrency mainstream, as evidenced by their app development and stated belief that “the world can have an Internet of Value Exchange.”

Investors: Goldman Sachs, IDG Capital Partners, Breyer Capital, General Catalyst Partners, Accel Partners.
Investment: $50 million, 30 April 2015.

 

21 Inc. Their simplistic website may not tell you much, but the people who are investing in their company do.

Investors: Dropbox CEO Drew Houston; eBay co-founder Jeff Skoll; Expeida CEO Dara Khosrowshahi; PayPal co-founders Peter Thiel and Max Levchin; and Zynga co-founder Mark Pincus.

Investment: $116 million, 10 March 2015.

 

KnCMiner. Chip power is constantly evolving and KnCMiner is a leader in that development. It has received multiple rounds of investment this year.

Investors: Creandum, Accel Partners, GP Bullhound, Creandum, Martin Wattin.
Investment: $29 million.

 

Coinbase. A San Francisco based company, Coinbase emphasizes the consumer experience and is a leading provider of wallets internationally.

Investors: New York Stock Exchange (NYSE), USAA, BBVA, DoCoMo, Draper Fisher Jurvetson (DFJ) Growth Fund, Tim Draper, Union Square Ventures, Ribbit Capital and Andreessen Horowitz, Vikram Pandit, CEO Tom Glocer.

Investment: $75 million, 20 January 2015.

 

Bitreserve. A leading converter of Bitcoin to other currencies, Bitreserve emphasizes transparency, posting transaction totals on their website.

Investors: NA.
Investment: $9.6 million, 30 December 2014.

 

Blockstream. This company is focused on improving blockchain technology as well as expanding its reach into other industries.

Investors: Reid Hoffman, Khosla Ventures, Real Ventures, Crypto Currency Partners, Innovation Endeavors, Future\Perfect Ventures, Mosaic Ventures, Ribbit Capital, AME Cloud Ventures, Nicolas Berggruen, Max Levchin, Ray Ozzie, Danny Hillis, Embrace.
Investment: $21 million, 17 November 2014.

 

Bitnet. This company provides Bitcoin services to businesses, designing systems for processing purchase transactions and more.

Investors: Highland Capital Partners, Rakuten, James Pallotta, Stuart Peterson, Bill McKiernan, Stephens Investment Management, Bitcoin Opportunity Fund, Commerce Ventures, Webb Investment Network, Buchanan Investment.
Investment: $14.5 million, 20 October 2014.

 

Bitfury. With data centers in Iceland and the Republic of Georgia, Bitfury is a leader in Bitcoin mining. They have received two rounds of funding in the last year, each for $20 million.

Investors: Bill Tai, Bob Dykes, Georgian Co-Investment Fund, Lars Rasmussen, Binary Financial, Crypto Currency Partners, Georgian Co-Investment Fund, Queensbridge Venture Partners and ZAD Investment Company, Jonathan Teo, Bill Tai.

Total Investments: $40 million.

 

Blockchain. Originally founded as a means to monitor Bitcoin transactions, Blockchain has become a leading developer of software for making the currency easier to use.

Investors: Lightspeed Ventures, Wicklow Capital, Mosaic Ventures, Prudence Holdings, Future Perfect Ventures, Rafael Corrales, Amit Jhawar, Nat Brown, Individual Investors.

Investment: $30.5 million, 7 October 2014.

 

Chain. A leading developer of Bitcoin APIs, Chain helps companies by providing rapid access to the blockchain.

Investors: Khosla Ventures, Pantera Capital, Barry Silbert, RRE Ventures, SV Angel, Thrive Capital, 500 Startups, Kevin Ryan, Scott Banister, Homebrew.

Investment: $9.5 million, 20 August 2014.

 

Xapo. This company made news last year by releasing a Bitcoin debit card, and recently moved its headquarters to Switzerland to better protect consumer privacy.

Investors: Index Ventures, Greylock Partners, Emergence Capital Partners, Yuri Milner, Max Levchin, Jerry Yang, Winklevoss Capital, David Marcus, Crypto Currency Partners.

Investment: $20 million, 7 August 2014.

 

Bitgo. Bitgo made a lot of news this year, for its innovative new insurance policy, and most recently for its shuffling of executive staff.

Investors: Redpoint Ventures, Bitcoin Opportunity Corporation, Radar Partners, Liberty City Ventures, Crypto Currency Partners, A-Grade Investments, Jeffrey S. Skoll, Bill Lee, Founders Fund, Eric Hahn, Bridgescale Partners.

Investment: $12 million, 16 June 2014.

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