Circle Raises $60 Million in Funding Backed by Baidu

  • Series D round includes former IBM CEO Sam Palmisano
  • Circle has set up independent company in China with local team

Circle Internet Financial raised $60 million in a funding round backed by Baidu Inc. as the startup that allows users to send payments for free also formed a China business to win customers in the second-largest economy.

Sam Palmisano, former chairman of International Business Machines Corp., and IDG Capital Partners supported the Series D financing, Circle said in a statement. Alex Norstrom, an executive at Spotify Ltd., will join the company’s board. 

Founded in 2013, Circle uses bitcoin’s blockchain technology so customers can instantly send payments in a message that can be accompanied by emojis or GIFs. Commercial services to Chinese consumers, where it will come up against Tencent Holdings Ltd. and Alipay, will start once the company gets regulatory approval and finds banking partners.

“In China there’s already incredible domestic companies -- Tencent and Alipay,” Chief Executive Officer Jeremy Allaire said. “We don’t have any belief that we can come in and dethrone those products, but there’s an opportunity for Chinese consumers that want to share value globally with friends in other parts of the world.”

Other participants in the funding include Breyer Capital, CICC Alpha, China Everbright Ltd. and Glenn Hutchins, the co-founder of Silver Lake Management, the company said. The company didn’t disclose a valuation.

Last year, Boston-based Circle raised $50 million in a funding round co-led by Goldman Sachs Group Inc. and IDG Capital.

Circle China has been created as an independent company with local investors to capitalize on a population that’s comfortable with payments made over social media.

Baidu’s investment is the latest in a series by the search company as it tries to diversify. The company is partnering with China Citic Bank Corp. and starting a financial technology incubator in Hong Kong. Baidu’s investment in Circle gives the company a stronger foot-holding in the payments space that’s dominated by Tencent Wechat and Alipay.

Tencent’s WeChat has more than 760 million users worldwide. Alipay is owned by Alibaba Group Holding Ltd.’s finance affiliate and has 450 million users.