It wasn’t too long ago that Coinbase became the first bitcoin startup to land multi-million funding from a top name venture firm as Fred Wilson’s Union Square Partners led a $5 million series-A round investment in the firm during May of this year. Now comes news from Coinbase via their blog that they have secured $25 million in series-B funding. Led by leading VC firm Andreessen Horowitz as well as existing investors Union Square Ventures and Ribbit Capital, funds are expected to be used to help the firm scale its growing business and customer base.
Provider of bitcoin wallets and merchant payment processing tools that can be linked to customer bank account, Coinbase announced that they currently have over 600,000 users. The figure compares to 200,000 being announced on August 1st, as well as 300,000 in mid-October.
For Andreessen Horowitz, this marks their first public investment in a bitcoin startup, although partners may have made smaller private angel investments in the space. Among partners, recent addition, Chris Dixon who will be receiving a board seat at Coinbase has publicly stated his interest in bitcoins as both a technology and investment thesis. As such, his involvement is not so much a surprise, but a vote of confidence in the financial potential of Coinbase.
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With $2.7 billion under management, noted investments in private companies of Andreessen Horowitz include Box.net, App.net, Foursquare, and Pinterest. Public or acquired firms they have invested in include Facebook, Twitter, and Skype. In an interview earlier this year with Jason Calacanis on This Week in Startups, Chris Dixon described the company’s investing philosophy. One of the points he made was that more than just seeking promising businesses, they want to see the founders also believe their businesses have the potential to become billion companies.
Describing the technical potential of bitcoin, Chris Dixon stated in the Coinbase post that “The designers of the Web built placeholders for a system that moved money, but never successfully completed it. Bitcoin is the first plausible proposal for an economic protocol for the Internet.” (more about the deal on Dixon’s blog)
In separate news, Coinbase also announced today that Gavin Andresen, Head Developer of the bitcoin open source software project had joined the firm as an advisor.