Coinbase Said to Be Valued at More Than $400 Million in FundingOlga Kharif
Coinbase Inc., provider of digital wallets for receiving and spending bitcoins, has raised $75 million in financing, which it said is the largest funding round yet for a bitcoin company.
The investment values the San Francisco startup at more than $400 million, according to a person with knowledge of the matter, who asked not to be identified because the valuation isn’t public. The round was led by DFJ Growth, with participation from existing investors including Andreessen Horowitz, Union Square Ventures and Ribbit Capital. The New York Stock Exchange, USAA Bank and Banco Bilbao Vizcaya Argentaria SA also participated.
The funding tops the $30 million that Blockchain Ltd., another bitcoin-wallet startup, received in October and brings Coinbase’s total financing to about $106 million to date. The investment also underscores how companies remain keen to invest in the virtual currency, even amid recent increased worries about bitcoin’s future. The price of bitcoin has declined 35 percent against the U.S. dollar so far this year, according to CoinDesk Bitcoin Price Index.
“This round really shows that smart money doesn’t pay attention to the price of bitcoin here,” Fred Ehrsam, co-founder of Coinbase, said in an interview. “Does the spot price of bitcoin matter to us? Not really. What smart money really cares about is the underlying technology.”
Ehrsam declined to comment on Coinbase’s valuation.
Coinbase will use the funds to expand to 30 countries by the end of this year, up from 18 today, Ehrsam said. The startup is considering offering services in India, Brazil, Argentina and the Philippines, he said.
The money will also go toward boosting the number of large merchants that work with Coinbase and releasing new tools that will make it easier for developers to integrate Coinbase into their websites. The company services 2.1 million wallets, up from about 600,000 a year ago.
“This is a huge space, and we believe there’s going to be a lot of successful companies,” Barry Schuler, managing director of DFJ Growth and the former chairman of America Online Inc., said in an interview. “We believe that this technology is going to be immense. It’s the most elegant technology to be built on top of the Internet since the Internet arrived.”
NTT Docomo Inc., Japan’s largest wireless carrier, also participated in the funding round, along with Vikram Pandit, former chief executive officer of Citigroup Inc., and Tom Glocer, former CEO of Thomson Reuters Corp.