US Bitcoin startup secures $9 million in funding
Circle, a US-based startup that intends to make Bitcoin more commonly available, raised $9 million in Series A funding in October.
Founder Jeremy Allaire intends to pull Bitcoin out of the shadows of the digital world — the realms of speculators, hackers, groups like Anonymous, and mail-order pot dealers — and into the mainstream. Funding came from Jim Breyer, of Accel Partners, and General Catalyst Partners.
Said Breyer: “The dramatic global growth in mobile, social and online commerce is creating the need and potential for a real global digital currency. With Jeremy’s vision for Circle and track record as an Internet pioneer, the opportunity here is to potentially build a significant global company.”
The challenge for Circle is to make the digital currency easy for merchants to accept and appealing for consumers to adopt.
On the consumer front, Circle will try to create an infrastructure that will secure transactions and keep user accounts private and safe. Mainstream adoption at the moment is hindered by fluctuating prices and concerns over security.
For businesses, or any institution really, Bitcoin offers a way for customers to make payments with minimal transaction fees, a huge advantage it has over credit card companies.
Allaire is known in tech circles as the founder of Brightcove, an online video platform that went public last year. In a talk he gave in Dublin just after the announced funding, Allaire compared Bitcoin’s current stage of development to the nascent stages of the Internet in the early 1990s.
The opportunity to shape the future of global commerce is at the heart of Circle, he has said. The key is adoption and making payments easier, secure and cheaper. Investors are betting that Bitcoin can do this.
Governments are also interested in Bitcoin, and Allaire has said his startup will follow all state rules and is regulated by the US Financial Crimes Enforcement Network.
Still, after the FBI raid on the Silk Road, an unregulated online marketplace accessible to internet users on the TOR network, popular adoption of Bitcoin will be fraught with obstacles and, likely, government regulation.
Of course, deregulation was the whole point for some early adopters of the digital currency, and there has been pushback from the core community regarding a move to the mainstream.
In fact, some in that community have taken to raising funds of their own for a project called Dark Wallet, a browser extension that will be designed to make transactions untraceable and thus illegible to governments anywhere in the world. On the project’s IndieGogo crowdfunding page, 63.25 Bitcoins, or about $41,500 at current rates, has been raised toward the creators’ goal of $50,000.