Bitcoin Startup Circle Grabs $50M to Add U.S. Dollar to Payment System
Circle, a bitcoin-based payment and money transfer business headquartered in Boston, has received $50 million in a new financing round led by Wall Street titan Goldman Sachs and Chinese venture capital firm IDG Capital Partners.
The company is using the funding to add capabilities, such as letting its customers hold, send, and receive U.S. dollars. Circle also wants to bring its product and services to China, which is where the IDG connection plays in, co-founders Sean Neville and Jeremy Allaire wrote on Circle’s blog Wednesday. The new dollar capability allows customers to maintain dollar balances that are FDIC-insured, as well as to use a Circle-based conversion service from dollars to bitcoins and vice versa, the executives wrote.
“Customers can accept bitcoin and expect Circle to convert it instantly into dollars in their Circle accounts,” the pair wrote in the post. “This gives customers the benefits of bitcoin payments without the risk of price volatility.”
Circle is enabling the U.S. dollar service for select users, and plans to add more until it is generally available. Wall Street has generally kept its distance from bitcoin-related businesses, whether for regulatory purposes or otherwise.
The only insight Goldman Sachs gave about its interest in Circle was from a statement made by Tom Jessop, the firm’s managing director for its principal strategic investments group: He said Circle and its management team are “a compelling opportunity in the digital payments space.”
Allaire, who is Circle’s CEO, hopes Goldman will work with Circle on a commercial basis going forward, he told Bloomberg Business. Circle raised a $17 million Series B round last year, with another $9 million from an October 2013 Series A, when it launched.
The company’s previous investors also participated in the new round, including Breyer Capital, General Catalyst Partners, Accel Partners, Oak Investment Partners, Fenway Summer, Digital Currency Group, Pantera Capital, and individuals.