Digital wallet services Coinbase recently raised $25 million in Series B funding. The funding round was led by Andreessen Horowitz and was also participated by existing investors Union Square Ventures and Ribbit Capital. According to a TechCrunch report, the funding round was deemed to be the largest so far for a Bitcoin-focused company. Coinbase to date has raised $31 million in funding.
Coinbase, which came out of Y Combinator last year, provides to merchants wallet and payment processor services, which were said to be similar to what PayPal offered ten years ago to provide a simpe way for transactions to happen.
According to co-founders Fred Ehrsam and Brian Armstrong, Coinbase has reached 600,000 in consumer wallets, a significant increase from 130,000 previously announced in May along with its first $5 million venture round courtesy of Union Square Ventures.
TechCrunch said the growth of Coinbase was simply organic, as a growing number of Bitcoin users made merchants to be more open to accept alternative payments. The number of Bitcoins in circulation is said to be at 16,000. On the other hand, the report insisted that Coinbase would need to build multiple products to serve both merchant and Bitcoin user/customer.
TechCrunch said proceeds from the funding round will go towards company expansion, particularly its staff of eight. Coinbase intends to grow the number of employees to around 50 or 60 around this time next year. The proceeds whill also be used towards Coinbase's continuous building of its latest products like text payments by providing additional services to developers.
Bitcoin investor Chris Dixon and Union Square Ventures' Fred Wilson will be joining the board at Coinbase.
TechCrunch said the Bitcoin has been at a tipping point in so many aspects. Due to a price bubble that happened in the spring, venture capitalists had gotten interest in the digital currency. On the other hand, Bitcoin has yet to be regulated by any government. Both the central banks of China and France have issued warnings regarding the use of the Bitcoin. The US, however, were more positive with the Bitcoin as federal officials in agencies including the US Justice Department saw promise as long as risks of money-laundering are handled properly.
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