As Bitcoin moves out of the digital underworld and into the mainstream, the crypto-currency ecosystem has been searching for its flagship company, or companies. Generation one platforms like Mt. Gox, Silk Road, and others have proven proved utterly incapable or unworthy of carrying that flag. But lately, bitcoin has been attracting seasoned entrepreneurs, marquee investors, and a degree of end-user scrutiny that will hopefully elevate the level professionalism and innovation across the network.
The latest company to plant its flag as a serious player in the space is Circle Internet Financial (aka Circle), the virtual currency wallet and exchange service which today announced $17 million in Series B funding from Breyer Capital, Accel Partners, General Catalyst Partners, Oak Investment Partners, Pantera Capital, Barry Silbert’s Bitcoin Opportunity Fund, the former Society for Worldwide Interbank Financial Telecommunication (SWIFT) CEO Leonard H. Schrank, and others.
The round brings Circle’s total capitalization to $26 million, on par with Coinbase as the most heavily venture-funded bitcoin enterprise with backing from several of the ecosystem’s most notable players. Circle currently has 23 employees and plans to double that by year’s end, growing across all areas of the business – operations, product, support, legal, compliance, and security – and adding international operations.
It’s not just the pedigree of Circle’s investors that should make users stand up and take notice, but its founder, Chairman, and CEO, Jeremy Allaire. Allaire is the founder and former CTO of Brightcove (NASDAQ) and also the founder of ColdFusion creator Allaire Corporation, which was acquired by Macromedia. Financial services and crypto-currencies are not the industries in which you want you want a pimple-faced college dropout to learn on the job. Allaire is anything but.
Another strong endorsement comes from the Treasury Department’s Bank Secrecy Act Advisory Group which has asked Circle to join its anti-money laundering and counterterrorist financing policy advisory group as a virtual-currency representative. Allaire and his team have been heavily involved in the ongoing regulatory process, including participating in January’s New York State Department of Financial Services hearings. It’s this sort of proactive governmental engagement that sets this generation of bitcoin companies apart from its predecessors
With all the accolades and now piles of venture cash announcing Circle’s arrival as a legitimate player in the bitcoin ecosystem, you could forgive everyday consumers for asking what it is the company actually does. That’s because Circle is currently in an invite-only phase and is only just beginning to pull the curtain back on its product.
The early party line is that Circle will offer online tools focused on making it easy and secure to acquire and transact using bitcoin. The company calls it, “reducing much of the friction and risk that is currently associated with Bitcoin.” Allaire has been publicly reluctant to see Circle labeled as a wallet and exchange service, seemingly for fear of being lumped in with other less-than-scrupulous businesses in those categories, but these nonetheless seem like the most appropriate descriptors based on what limited information is available today. More broadly, the company looks to be building an online virtual currency bank.
Circle’s ambitions, according to Allaire, are to make bitcoin more accessible to the masses, something that is desperately needed. The desire to go after mainstream users, rather than tech-savvy early adopters in part explains Circle’s slow rollout. Allaire tells Coindesk:
We are being very careful and deliberate in how we add users to our system, ensuring that it is a product that users value and recommend to their friends and family, and that, from an operational perspective, we are able to deliver an exceptional experience.
[Most existing bitcoin companies have] failed to meet consumer support expectations, they’ve failed to meet even rudimentary security and audit obligations, and so we believe that the bar needs to be high in terms of offering a consumer service around bringing bitcoin mainstream.
Such a radical understatement would be laughable if it weren’t so true, and there hadn’t been so many millions of consumer dollars destroyed in the process.
Between the Mt. Gox fiasco and the shuttering of the Vicurex exchange, bitcoin has certainly taken its licks lately. But the last few weeks have also been full of positive news for bitcoin, including the IRS (finally) handing down guidance on the tax treatment of virtual currencies, hundreds of millions in institutional capital setting its sights on the crypto-currency ecosystem, and this.
Plenty of smart people are betting that Circle will soon be the next bit of bitcoin news worth celebrating.
[Image via Circle]