Silicon Valley high-profile investors appear to be lining up behind Bitcoin, the crytocurrency that has won the hearts of many tech workers despite its volatility and uncertain future.
Coinbase, an online exchange for purchasing, storing and transacting in bitcoins, is reportedly in talks to raise $40 million to $60 million, according to Re/code. The tech news site reports that venture capital firm Draper Fisher Jurvetson is expected to lead the funding round, which would value Coinbase at about $400 million.
Coinbase was founded in San Francisco in 2012 by Brian Armstrong and Fred Ehrsam. It s already raised about $25 million from Silicon Valley investors including Andreessen Horowitz and was backed by Y Combinator.
Reports of the funding round is the latest indication that Silicon Valley continues to be a Bitcoin cheerleader, although much of the American public — if they ve even heard of bitcoin — remain skeptical, and the feds have refused to recognize it as legal currency.
At a two-day conference dedicated to discussing Bitcoin in San Francisco earlier, Marc Andreessen, founder of Menlo Park venture capital firm Andreessen Horowitz, said Bitcoin is as bulletproof as anything I have ever seen.
Bitcoin is a cybercurrency and payments network created in 2009 by a mathematical formula as an alternative to banks and government-controlled currency systems. Bitcoins are added to the network by computer programmers around the world, and most bitcoin is bought and traded on global Internet exchanges. Coinbase says its users have created two million bitcoin wallets through its service. ON Monday, one bitcoin was worth $383.55. It s value has been as high as above $1,000.
Bitcoin enthusiasts are still working to repair the damage done to the public s perception of Bitcoin after one of the world s largest bitcoin exchanges, Tokyo-based Mt. Gox, went belly up and lost hundreds of millions of dollars belonging to the site s users. Mt. Gox filed for bankruptcy protection in a Texas court in June.
Still, startups like Coinbase are popping up, and raising respectable rounds. Xapo, a Bitcoin wallet and lock-down vault, raised a $20 million Series B in July, doubling the startup s total funding. Investors include PayPal co-founder and serial entrepreneur Max Levchin, along with firms Emergence Capital Partners, Index Ventures and Greylock Partners.
And Argentine startup BitPagos, which processes credit card and bitcoin transactions for retailers and hotels, announced it had raised a seed round of $600,000 led Pantera Capital, Tim Draper, Barry Silbert and Boost Bitcoin Fund.
Even big tech firms and retailers have embraced Bitcoin. Overstock.com remains one of the largest retailers to accept bitcoins as payment, and PayPal in September struck a deal with Coinbase and two other payment service providers so that online merchants that use PayPal will also be able to accept bitcoins through the same online checkout system.
