It’s the largest funding round to date for a Bitcoin-focused company, and comes amid the cryptocurrency’s recent slide to fresh lows. The currency is trading at around $212 today, down from above $1,000 more than a year ago.
“The timing reminds me of the post dot-com bust,” said CEO Brian Armstrong. “Google was started in 1998 and people were saying that the Internet bubble was over. But these massive companies get built over long time periods of time. It’s not really about the price. It’s about building something useful and I think people are missing the bigger picture.”
The company also attracted the participation of several Wall Street institutions including The New York Stock Exchange, which Armstrong touted as a sign of Bitcoin’s increasing legitimacy in the financial world. Former Citigroup CEO Vikram Pandit and former Thomson Reuters CEO Tom Glocer also made personal investments in the company. Armstrong said the company’s new strategic investors all put in at least $1 million.
While the bulk of transactions in the Coinbase network are still for day-trading and investment, a growing share is devoted to transactions for goods and services. Armstrong says the company tracks a metric called “non-trading transaction volume,” and it’s at least tripled over the past year to about 12 percent of all activity on the network. One of the things that has helped has been the growing number of merchants adopting Bitcoin like Expedia and Intuit. Now there are at least a dozen merchants doing over $1 billion in annual transactions accepting Bitcoin.
Armstrong said the funding will go toward building more of a mobile presence this year. He said that many would-be users of Bitcoin live in the developing world, where mobile access to services is much more paramount. Currently, Coinbase is available in 19 countries and Armstrong would like the company to reach 30 by the end of the year.
They also want to build out the developer platform; the company already has the most popular API for Bitcoin available and there are a handful of services like peer-to-peer lender BTCJam, which have broken out.
The company currently has 56 full-time employees.