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 PayPal 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.