technology

Bitcoin Wallet Maker Ledger Raises $75 Million for Security Push

  • Startup makes dongles to store cyptocurrency private keys
  • Sold 1 million units last year; targeting hedge funds, banks
Larcheveque says Ledger’s Bitcoin wallet is "impossible to penetrate."

Ledger SAS, a startup that makes electronic wallets for Bitcoin and other cryptocurrencies, has raised 61 million euros ($75 million) from investors including Draper Esprit Plc.

“Everything blockchain depends on keeping the private key secure,” Ledger Chief Executive Officer Eric Larcheveque said. “If you keep this private key on your computer, it’s like buying gold bars and storing them in plain sight on top of your chimney.”

The company, which makes USB dongles that contain a chip for safely storing and carrying around cryptocurrency passwords, is raising money to pay for hiring, research and development, as well as to finance its expansion.

With offices in Paris and San Francisco, Ledger targets selling 3 to 6 million of its hardware wallets this year. It has so far sold about a million, Larcheveque said.

The startup is profitable and had revenue of 46 million euros in 2017 split across the U.S., Europe and Asia, compared to 600,000 euros the year before. It has raised 70 million euros in total, including this round, since it was founded in 2014. Larcheveque declined to disclose valuation.

Bitcoin Frenzy

Bitcoin is the largest cryptocurrency, and with its growing importance there’s been a wave of dedicated hedge funds and established players planning on setting up trading desks for digital currencies. Still, some security issues need to be sorted out, and volatility is a concern -- bitcoin tumbled below $10,000 this week, bringing its loss to almost 50 percent from a record set only a month ago.

Larcheveque describes Ledger’s products as “small-scale secure computers” that act as vaults, making sure private keys never become accessible to thieves, online or anywhere else. The dongle lets customers do cryptocurrency transactions, using the keys stored within it. Nano S, the cheaper of two models, costs 79 euros before taxes.

A Ledger SAS electronic wallet connected inside the offices of La Maison du Bitcoin bank in Paris.

Photographer: Christophe Morin/Bloomberg

Ledger wants to increase revenue by growing the software portion of its business, aimed at customers like hedge funds, banks and corporates, which doesn’t rely on the physical dongle but instead on a more complex server-based structure. Even for the USB dongle, about a third of customers today are professionals, typically traders and other people at banks, Larcheveque said.

“Eventually we’ll be able to put our software on other hardware -- that’s a hint at our future roadmap,” Larcheveque said. “Ultimately we want to be a technology giant securing bitcoin and blockchain infrastructure.”

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