Coinbase, the digital currency wallet and payment processor for merchants, has raised $25 million in a Series B round of funding led by Silicon Valley-based venture capital firm Andreessen Horowitz. Union Square Ventures and Ribbit Capital also participated in what is described as the largest round of funding for a company that works with digital currency.
Coinbase launched last year as a Y Combinator creation and currently boasts 600,000 consumer wallets, a sizable increase from the 130,000 accounts announced by co-founders Fred Ehrsam and Brian Strong back in May. Additionally, Coinbase is already working with 16,000 merchants as a payment processor but given the influx of consumer wallets, that number could also rise sharply in the coming months.
The latest funding will reportedly be used to expand the company from a team of just eight to between 50 and 60 by this time next year. We are also told some of the money may be used to help build out recent products such as recurring payments for subscriptions and SMS payments.
Venture capitalist Chris Dixon told TechCrunch that Bitcoin adds an economic layer that has long been needed on the Internet. True enough, as the publication correctly points out that the currency’s universal measure of agreed-upon value and its low-level technical protocol helps to cut charges from middlemen like credit card companies.
While the People’s Bank of China recently determined Bitcoin wasn’t a currency, the US has had a more favorable outlook in recent weeks. The Senate hosted a hearing on Bitcoin and other virtual currencies late last month that sent share value through the roof, topping more than $1,000 per Bitcoin at one point.