Goldman Joins Bitcoin Startup Circle’s $50 Million FundraisingOlga Kharif
Goldman Sachs Group Inc. invested in a $50 million fundraising round in bitcoin startup Circle Internet Financial Ltd., another sign of the growing interest in digital currency technology by established financial institutions.
IDG Capital Partners co-led the round, which also included existing Circle investors such as Breyer Capital, General Catalyst Partners, Accel Partners and Oak Investment Partners, Circle said in a statement late Wednesday. The company offers a variety of services for storing and using bitcoins.
The round brings Circle’s total funding to $76 million, and “is a material step-up in valuation from our past financing,” Jeremy Allaire, chief executive officer of the Boston-based venture, said in a telephone interview. He declined to disclose the specific value.
IDG Capital, which is based in China, could help Circle expand into that country, while Goldman Sachs could eventually become a business partner, Allaire said. Goldman Sachs’s participation came through its principal strategic investments group, which invests the firm’s own money in exchanges and other electronic platforms.
“Our hope is to work with Goldman on a commercial basis as we grow the business,” Allaire said.
Circle plans to use the funding for product development and international expansion, he said. Some of the money may go toward marketing a new feature that lets Circle customers hold, send and receive U.S. dollars with no fees. The feature will help turn the company into an international money-transfer service, a peer-to-peer payment service and a bank. Eventually, there are plans to move into other currencies, such as the Chinese yuan, he said.
“We think of ourselves as a consumer-finance company,” Allaire said. “With the advent of open Internet platforms, it’s now possible to provide some of the traditional capabilities that traditional retail banking provided, as a free service.”
In January, the New York Stock Exchange said it would invest in Coinbase, a platform for trading digital currency. Wall Street professionals have joined bitcoin ventures in the past year. Former senior JPMorgan Chase & Co. executive Blythe Masters now heads Digital Asset Holdings LLC, which plans to use bitcoins and related technology for settlement and record-keeping of stocks, mortgages or other loans.