An Offer You Can’t Refuse: Bitcoin Startup BitPay Raises $2M Led By Founders Fund (The VC Run By The PayPal Mafia)
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.
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Square Hires An Exec From PayPal To Form Payments Partnerships With Retailers
After bringing on a new global business lead from Google, Square is making another key executive hire today. The payments company is announcing that Alex Petrov, a former PayPal exec, will be Square’s Vice President of Partnerships.
Petrov was most recently the vice president of retail marketing at PayPal, where he was responsible for merchant marketing and helping launch PayPal into offline retail. He was previously the vice president of consumer brands at Safeway, where he led the marketing and growth of Safeway’s private brands portfolio, including launching over 1,000 new products. Petrov was also a marketing executive at Nestlé.
“Square’s passion for innovation and its relentless focus on the customer experience completely change how retailers can do business,” said Petrov in a release. “I look forward to bringing Square to merchants of all sizes, from local businesses to the largest retailers in the world.”
Square, who just updated its iPad register app to be more restaurant-friendly, says that its adoption among merchants is growing at a faster rate on iPads, where customers are using Square as a full point-of-sale system. iPad customers now represent nearly 50 percent of total payments processed by Square. The average payment volume processed by these customers is also more than double the average volume processed by Square customers using smartphones.
More high-profile brands and partnerships like the Starbucks deal could be helpful for Square when it comes to marketing and branding. We’re told that Petrov will be working on forming these types of partnerships, as well as strategic business development and customer acquisition for Square.
Read more here: Square Hires An Exec From PayPal To Form Payments Partnerships With Retailers
Chris Dixon Plans On Investing In More Bitcoin Startups, Says More Entrepreneurs Are Getting Involved
Chris Dixon joined our co-editor Eric Eldon this morning at Disrupt NY 2013 to discuss his move out to San Francisco for a job at Andreessen Horowitz. One of the areas that interests him the most is the much-hyped Bitcoin space.
The reason why Dixon is so interested is because it solves many problems for those who have tried to start a financial company in the past. He said: “There’s the whole problem of fraud online, which is a massive problem, along with all of the payment fees. The interesting thing with these math-based currencies is that you can do transactions without trusting the person at all.”
He went on to discuss the beauty of Bitcoin, mostly the anonymous aspect of it, requiring no authentication or trust on either side of a transaction. Dixon stated: “The Internet is an anonymous network, but it requires authenticating identity. The exciting thing about these new currency schemes is that you have these anonymous payment systems grafted onto anonymous networks.”
An example of the type of companies that Dixon is interested in investing in when it comes to Bitcoin are the companies like “Pay For Bits,” who would like to be the PayPal of Bitcoin. Due to regulations alone, there’s been a massive wall in between startups and doing something like this with actual money.
Dixon feels like the best entrepreneurs on both coasts will probably start getting into Bitcoin and that means that we’ll see more innovation in the space.
While top entrepreneurs won’t necessarily jump off of what they’re doing to start a Bitcoin company, but there are elements of the anonymous currency that could creep into existing products. For example, Reddit added Bitcoin as an option to purchase gold on the site, and we’ll have to see more of those types of things happen before the real products and investing starts.
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John Donahoe, eBay President And CEO, To Take The Disrupt NY Stage
We’re pleased to announce John Donahoe, President and CEO of eBay, as a Disrupt NY speaker. Under his tutelage, eBay and its subsidiary PayPal have grown tremendously, with each company expecting to do $20 billion in 2013 mobile commerce.
Donahoe took eBay’s reins in 2008 after Meg Whitman’s departure. Since then, he’s managed to dramatically increase the company’s revenue and maintain its spot as a global leader in ecommerce. He’s an expert in his field and we’re very excited to have him speak at Disrupt NY.
With the conference just a month away, kicking off on April 27 at the Manhattan Center, he joins our growing list of speakers that currently includes Ron Conway, Ben Lerer, and David Lee, among many others.
Tickets are currently available with the early bird discount ending on April 11. Of course you can snag a ticket for free by participating in the Hackathon.
Our sponsors help make Disrupt happen. If you are interested in learning more about sponsorship opportunities, please contact our sponsorship team here sponsors@techcrunch.com.
John Donahoe
eBay, President and CEO
John has been President and CEO of eBay Inc. since March 31, 2008. Under John’s leadership, the company has become a global commerce platform and payments leader, with revenue in 2012 of $14.1 billion. Across its eBay, PayPal and GSI Commerce platforms, the company enabled $175 billion of commerce in 2012, which represents about 18 percent of e-commerce worldwide and about 2 percent of global retail. The company also is a mobile commerce leader, with eBay mobile commerce volume of $13 billion in 2012, and PayPal mobile payments volume of $14 billion. The company is focused on enabling commerce as a partner — not a competitor — to sellers of all sizes, from entrepreneurs and small businesses, to global brands and retailers.
John joined eBay in March 2005 as President of eBay Marketplaces, responsible for all elements of eBay’s global ecommerce businesses. In this role, he focused on expanding eBay’s core business, which accounts for a large percentage of the company’s revenues. John also oversaw a number of strategic acquisitions, including Shopping.com, StubHub and classifieds sites, such as Gumtree. During his three-year tenure as President of Marketplaces, revenues and profits for the division doubled.
Prior to eBay, John spent more than 20 years at Bain & Company, a worldwide consulting firm based in Boston. Starting as an Associate Consultant, John rose to become the firm’s president and CEO in 1999, overseeing Bain’s 30 offices and 3,000 employees.
John received a Bachelor of Arts in Economics from Dartmouth College and an MBA from the Stanford Graduate School of Business. Additionally, John serves on the Board of Directors for eBay Inc. and Intel Corp.
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