Tim Draper, Nas Back Bitcoin API Maker BlockCypher in $3 Million Round

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BlockCypher has raised more than $3m in a seed-funding round that will allow it to expand its operations in Europe and Asia.

Tim Draper and Yahoo co-founder Jerry Yang’s AME Cloud Ventures are among the many that invested in the round. Other participants included Boost VC, 500 Startups, Crypto Currency Partners, New Enterprise Associates (NEA), hip-hop artist and VC Nasir Jones, Jesse Draper and Shawn Byers.

With this latest round of funding Blockcypher said it can now seek to provide customers deeper analytics while continuing to build services and invest in scaling and security. The round coincides with the company’s release of an open-source block explorer that will showcase four different cryptocurrencies – bitcoin, litecoin, dogecoin and BlockCypher Testnet.

BlockCypher CEO and co-founder Catheryne Nicholson also sought to paint the funding round as one that will find the company improving its technology.

Nicholson told CoinDesk:

“Using the BlockCypher Web Services, developers can expect reliable operations, very innovative APIs, the ability to scale as they need and they also get deep understanding of the technology powering cryptocurrencies at their service.”

The funding coincides with an uptick in offerings from cryptocurrency API providers, with CEX.io, Chain, Coinbase and Neuroware all making headlines in recent weeks.

Focus on blockchain applications

Many of BlockCypher’s investors spoke to the company’s focus on technology, the potential of the blockchain and the future of blockchain applications.

Most took an agnostic approach, choosing to highlight not simply bitcoin, but more specifically its underlying distributed ledger technology.

“We think one of the most promising areas in bitcoin is in the blockchain technology layer,” said Foundation Capital general partner Charles Moldow. “It’s where the greatest innovation is happening and it’s at the core of BlockCypher’s expertise.”

NEA partner Rick Yang also emphasized how developers will be empowered by the company's offerings using a similar wording.

“BlockCypher has built the only cloud-optimized blockchain technology layer, allowing developers and large enterprises to easily build and adopt block chain technology," he said.

2014 was a breakthrough year for the blockchain, bringing much of the excitement around its abilities and possibilities for ledger-based applications. PeerNova, HashRabbit, Blockstream and BlockScore are just some of the many emerging startups working to utilize the blockchain for more than bitcoin transactions.

Nicholson, too, emphasized the blockchain in her comments, adding:

“Most of the time in software you see improvements or iterations on existing frameworks but very seldom do you see brand-new technology like blockchains."

Zero-confirmation transactions

According to the company, BlockCypher Web Services is currently processing half a million events and customers worldwide daily.

Unsurprisingly, it has attracted fans of its offerings, including Brian Gamido, CEO of Philippine remittance company Paladin.

“I like their ability to quickly innovate and integrate cutting-edge block chain features into their solution," Gamido said.

One such feature is the company’s confidence factor, which, Nicholson said, “is only a taste of things to come”.

The zero-confirmation confidence factor, a signature BlockCypher product, allows merchants to process bitcoin transactions within seconds, instead of hours, and with 99.99% confidence.

“Our back-end is powered by our own full-node block chain daemon that's been optimized for scale and reliability in large cloud deployments,” she said. “This gives us a lot of control in what we can build as we're directly plugged in the peer-to-peer networks.”