BitPay, the startup with ambitions to become the PayPal of the bitcoin world, is today announcing that it has raised another $2 million. And in a kind of poetic justice, the round is led by none other than the Founders Fund, the VC started by what’s commonly called the PayPayl Mafia.
The Atlanta-based startup says that it was not planning to raise any money at the moment — it announced an initial raise of $510,000 only in January. That was its first outside funding after being bootstrapped internally. However, the company also says that it couldn’t say no, considering who was asking:
“We were not looking to raise any capital until later this year, but we could not ignore the opportunity to have Founders Fund involved with BitPay,” Tony Gallippi, co-founder and CEO of BitPay, notes in a news release on the deal. “There’s no single investment firm we would rather have on our team right now than Founders Fund.”
Nevertheless, it looks like the extra money will be used for hiring: there are currently two jobs open for node.js developers “who are excited about bitcoin.” BitPay is also looking for a UX designer. There will also be more investment in its platform and further product development.
Founders Fund partners know a thing or two about payment platforms — given their past experience as founders and senior execs at PayPal and other companies. Their interest in BitPay comes from the fact that it, and bitcoin, in general, appear to be growing like wildfire.
“BitPay’s ambitions have been global from the outset, and at Founders Fund we have been impressed with the company’s tremendous growth as they sign up hundreds of new customers a day, turning the potential for opportunity into a reality,” said Brian Singerman, a Partner at Founders Fund, in a statement.
When we covered the company’s first raise in January, we noted it had already signed up 2,100 businesses that were using its platform to process bitcoin payments. In April, it added nearly that many again: 1,900 merchants, and they are now processing $5 million per month in bitcoin transactions covering areas like electronics, precious metals, “and other low-margin products.” The promise of using bitcoin over dollars is lower fees, and companies are seeing “a large increase in profitability by accepting bitcoin payments,” the company notes.
In addition to Founders Fund, Max Keiser’s fund Heisenberg Capital, a London-based fund focused on bitcoin companies, is also involved in this seed round. It comes as a number of other VCs are also jumping into the bitcoin landgrab.
The terms of this most recent round were not disclosed, the company notes, “although 100% of the existing seed shareholders exercised their pro rata rights to maintain their ownership percentage in BitPay.” Previous investors in BitPay included Shakil Khan (the Path and Spotify former head of special projects, who has also launched his own bitcoin information resource, Coindesk), Barry Silbert, Jimmy Furland and Roger Ver.
Chris Dixon, the entrepreneur-turned angel investor-turned general partner at VC firm Andreessen Horowitz, today said that he believes the 3D printing movement has the potential to revolutionize manufacturing and that it is an area where he would like to make multiple investments in the future. In contrast, he described startups in areas like social networking facing “general fatigue”. Earlier this month, Chris Dixon and Andreessen Horowitz led a $30 million Series C round in Shapeways, a 3D printing company, where he has now joined the board.
Shapeways is indicative of an untapped opportunity in hardware, he said. “3D has been talked up a lot, but it’s received very little investment from traditional VC firms,” Dixon said today on stage in an interview TC Disrupt.
“For us, we think it’s a major, incredibly significant innovation. It will transform manufacturing and I can see us making multiple investments.” Indeed, a lot of the smaller hardware players have turned to platforms like Kickstarter instead not just to raise money but also to drum up consumer interest and profile for their projects. This has almost become like a testing ground, with the most successful then eventually converting that growth into more traditional investment routes for startups.
New York, he said, has become a kind of “hub” for hardware, and it has opened up the opportunity for new startups and new investing in the city. New York, he said, is at the center of what he calls a “hardware renaissance”, with the clever engineers who had in the past put all their efforts into working on social networks “now working on hardware devices.”
He said this is because social networks are in the middle of a “general fatigue” and so people have turned to wanting to do “something tangible.”
The huge rush of smartphone devices hitting the market has also had an impact on the larger market for hardware and wearable computing products, he said. “The smartphone explosion has lowered the cost for a lot of components and that has dramatically lowered the costs of producing devices,” he noted.
He points out that the kind of disruption that a company like Shapeways provides is “innovation at the high end.”
He also compared hardware developments to “the same forces that when you think about what the internet did for written work.”
“Before the Internet you had to go to a publisher and get an investment. Now you can publish you ebook or blog and it dramatically lowered the cost and enabled the long tail, democratized writing. We can see 3D printing doing that to manufacturing. You can cut a deal with manufacturing now and have a Shapeways printer and the batch size is one.”
Dixon also compared the general climate for startups in New York in general to life in San Francisco.
“There are plenty of great investors here and that attracts a lot of entrepreneurs. The one thing that is missing is a whole mid-level layer. If a company has a hit product and want to scale and hire employees 50 to 100. If you want to go international, or scale a sales force. If I want to figure out a monetization thing in San Francisco I can go to Google to get that.” That acceleration is still developing here in New York, he says.
San Francisco is similar to New York with a lot of consumer stuff. Down the peninsula you have infrastructure and hardware but San Francisco is pretty similar to the New York scene, taking technology and applying it to the real world.
Watch the full video of Chris Dixon’s interview here:
Editor’s note: Danae Ringelmann is a co-founder of Indiegogo. Prior to that, she was a securities analyst at Cowen & Co. where she covered entertainment companies, including Pixar, Lionsgate, Disney and Electronic Arts. Follow her on Twitter @gogoDanae.
Happy Anniversary! One year ago, U.S. lawmakers joined together with overwhelming bipartisan support to pass the JOBS Act. It was an exciting moment in history — one that my co-founders and I at Indiegogo didn’t expect to see for many years, especially not within just five years of launching our perks-based crowdfunding platform in 2008.
While the Securities and Exchange Commission’s rule-setting period has taken a bit longer than originally hoped and thus equity crowdfunding is taking longer to introduce than the Act anticipated, we’re quite pleased that the SEC is taking the process seriously.
Striking a balance between the need for regulation and the danger of over-regulation is tricky. Too little regulation could lead to risky behavior — while too much regulation could stifle innovation and competition, and actually block the very economic activity equity crowdfunding is poised to create.
Crowdfunding rose into the mainstream long before the JOBS Act was passed. Since the launch of our perks-based approach to crowdfunding over five years ago – where entrepreneurs, artists and causes raise money in support of their dreams online by offering perks to funders — hundreds of other platforms have followed suit across the world.
When equity crowdfunding is introduced and allows funders actually to own a piece of the new businesses, pro-JOBS Act platforms like perk-based incumbents Indiegogo and Rockethub, or new equity-only players like Crowdfunder, will need to innovate by developing and testing new procedures that are safe, robust and customer-driven. As this is the first time equity crowdfunding will be possible in the Internet age, platforms need the opportunity to experiment, learn and build what customers actually need and want — rather than what regulators might think customers could want. Too much regulation could simply stifle the innovation required to make equity crowdfunding work.
Too much regulation could also reduce competition and lock out smaller equity crowdfunding platforms from launching, as burdensome regulation would make it expensive to get off the ground. Ironically, this would benefit well-resourced incumbents like us. But this is not what we would want.
For Indiegogo, we have a healthy and growing perks-based business and do not need equity crowdfunding to happen. That said we’d be disappointed if equity crowdfunding never has the chance to realize its innovation potential. The concept of equity crowdfunding is 100 percent in-line with our mission to make finance efficient and fair — removing gatekeepers from interfering with making dreams come true. We’ve innovated and developed an algorithm-driven platform in order to deliver a gatekeeper-free experience on our trusted perks platform. It would be disappointing — for example – if regulation somehow required us to put the gatekeeper back into the process, thus stifling our innovation and ability to make finance efficient and fair.
We’d also be disappointed if the regulation killed our competition, leaving us the sole player. As an equal opportunity platform, we’d defy our entire reason for being by hoping for a competition-free world.
Indiegogo pioneered crowdfunding as a way for people to fund what matters to them — whatever that might be. We don’t curate. We don’t judge. There are no gatekeepers on Indiegogo. We believe every idea (as long as it’s legal) deserves the right to connect with its audience and see if its audience is willing to fund it.
As a result of our inclusive approach, unique ideas — creative, cause and entrepreneurial — are coming to life through crowdfunding on Indiegogo as I write. They include the Breathometer that turns a smartphone into a breathalyzer, the athletic bag company Activyst that supports girls sports programs across the world, and the band Avasa & Matty, a husband-wife duo working on their next album. Even the world’s first baby was crowdfunded last year. (The campaign helped a family pay for in-vitro fertilization). These ideas are not alone. Every week, Indiegogo distributes millions of dollars in four currencies to campaigns in every country.
Given we aren’t in the business of curation, we want to empower as many people around the world as possible. Nothing proves this better than the fact that we not only allowed, but often recognized that we had another crowdfunding platform use Indiegogo to raise money to launch.
So if the rules were up to us, given our inclusive approach and equal-opportunity philosophy, we would opt for a more open environment where platforms could innovate and compete freely to prove themselves superior, even if that meant more competition for us.
At Indiegogo, we’re excited to see the SEC release the rules. However, even without equity crowdfunding, new businesses have continued to thrive on Indiegogo. In the last year since the JOBS Act passed, more than 15,000 entrepreneurial campaigns raised money on Indiegogo in the U.S. alone.
Businesses like the first package-free grocery store In.gredients raised $15,000 to open its doors. Due to the market validation from crowdfunding, now traditional financiers are calling the team to ask how they can help the business expand. Innovative products like the 1:Face Watch, raised more than $357,000 to bring their watch to market, while giving people the opportunity to support the cause of their choice. Due to the risk-mitigation benefits of crowdfunding, the team didn’t face the risk of overproduction or underproduction.
Shareconomy ventures like the mobile canning service for craft brewers The Can Van also benefitted by garnering publicity they never could have imagined through their campaign. Due to social media integration, crowdfunding helped this team turn supporters into grassroots marketers overnight.
These job-creating endeavors and their entrepreneurial neighbors on Indiegogo received money from more than 200,000 people across all 50 states who voted with their dollars to bring these ideas to life. This clearly demonstrates how crowdfunding provides a catalyst not just for funding, but for traction, awareness and market validation as well. I wonder what the numbers would be when equity is part of the picture — when the JOBS Act turns two. Exciting times are ahead. History in the making.
Originally posted here: Crowdfunding Industry Celebrates First Anniversary of JOBS Act Despite Delays
Intel Capital, the venture arm of Intel, boasts over 120 portfolio companies to have listed publicly on the NASDAQ alone. In celebration of that, President Arvind Sodhani rang yesterday’s closing bell, and we caught up with him to chat about the future of the Ultrabook platform, wearable computing, and advancements in voice and gesture technology.
Intel Capital has actually invested in two of our most recent Disrupt alumni, Ark and Expect Labs, which focuses on predictive voice transcription to help you out as a digital assistant while you’re on the phone.
Sodhani hinted quite strongly that Expect Labs could potentially be the company to bring voice support to the Ultrabook platform, a promise Intel made in October of 2012.
“Our platforms, ultrabooks, tablets and laptops, will have a digital personal assistant on them in the next several years,” said Sodhani. “They’ll anticipate what you want to do next, what you need, and they’ll be context-aware.”
“Expect Labs fits into that very nicely,” said Sodhani. He also mentioned that Intel is looking at other companies for both speech and gesture recognition, but Expect Labs is clearly in the running.
Along with the rapid expansion of the cloud, Sodhani believes that 2012′s onslaught of voice-powered technology will only continue to grow alongside gesture-recognition technology.
As will wearables. Though Intel Capital hasn’t yet invested in wearable computing hardware, Sodhani admits that they’re certainly open to it should the right opportunity arise.
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