Startups

BlockCypher Raises Seed Funding To Be The Web Services For Cryptocurrency

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With an eye toward making blockchain technology easy to integrate into any application, BlockCypher has raised $3.1 million in its first round of financing.

The financing comes amid a steep slide in Bitcoin pricing over the past year, which has stymied some of the enthusiasm in the market.

Bitcoin’s collapse will have little impact on BlockCypher, since, according to co-founder Catheryne Nicholson, the company’s technology works for any cryptocurrency.

“We basically do web services for blockchains,” says Nicholson. “Were software infrastructure and we enable developers to easily build, monitor, and secure blockchain applications.

Using BlockCypher developers don’t have to start from ground zero says Nicholson. The genesis for the San Mateo, Calif.-based company came from work that Nicholson and her co-founder Matthieu Riou,

“We installed one of the first wallets… and we kept thinking someone is going to do something. The usability was just horrible and then came the realization that we should do something about it,” says Nicholson. “That’s how we got into the infrastructure side.”

Using the technology, developers can build a cryptocurrency wallet in less than a day.  “We offer a multi-sig API, and a payment API… Developers don’t have to rebuild all of that from scratch. they can just build the application layer.”

In its first applications the company focused on a way to reduce the transaction time for processing a bitcoin with a predictive tool to determine whether the blockchain would approve a transaction.

“There are lots of innovative ways that the future of monetization is going to hold for us when you can do micropayments of actual data throughput,” says Nicholson. “We have the whole swath of applications which we enable.”

Companies like Coinalytics, which is building analytics and insight into what’s happening on the bitcoin blockchain, or the Singaporean exchange CoinHako (one of the fastest in transaction processors in Asia) — or Palarin, a remittance company from the Philippines.

“We truly truly believe that payments and finance, this is just the tip of the iceberg,” says Nicholson. “Developers that are using us are building registries for records like healthcare records… where they’re putting a placement of a hash on the blockchain. We see a startup that’s building distributed hosting so you can fire up a server in the middle of Argentina… We are seeing legal documents that are being put on the block chain that are being developed out of Sri Lanka.”

Nicholson’s obvious excitement is catching. Her company has attracted three generations of venture capital dollars through investments from the entire Draper family.

Other investors in the round include Foundation Capital, New Enterprise Associates, Jerry Yang (through AME Cloud Ventures), Upside Partnership, Streamlined Ventures and Fenox Venture.

Jesse Draper (better known as Valley Girl — and Tim Draper’s daughter) and Shawn Byers (also known as Mrs. Brook Byers), are both investing in the round as well.

“Investing in women entrepreneurs is the best way to increase the number of women in technology. When girls have women founders as role models, they become founders themselves,” said Jesse Draper, CEO, Valley Girl Ventures. “What BlockCypher is doing with block chain technology will change the world: women must be involved.”

Indeed, block chain technology is at the vanguard for what cryptocurrencies can eventually achieve, according to investors like Charles Moldow, a general partner at Foundation Capital.

“We think one of the most promising areas in Bitcoin is in the block chain technology layer: it’s where the greatest innovation is happening and it’s at the core of BlockCypher’s expertise,” said Moldow in a statement.

Additional BlockCypher investors include Ben Narasin and TriplePoint Capital, Ken Goldman (CFO Yahoo), Sanjiva Weerawarana (CEO WSO2), VoyLét Capital, Granite Ventures, Boost VC, 500 Startups, Crypto Currency Partners, Michael Liou, and hip hop artist, Nas (I guess he’s looking for more than dead presidents to represent him these days).

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