Wall Street may be gearing up to enter the Bitcoin market in a big way, but Silicon Valley is already there.
Bitcoin exchange and wallet service Coinbase announced today that it has raised $25 million in a Series B round led by Andreessen Horowitz, the largest fundraise ever by a Bitcoin company.
San Francisco-based Coinbase is perhaps the most prominent Bitcoin operations in the United States, allowing individuals to buy and sell Bitcoin with a U.S. bank account and allowing merchants to accept the digital currency as payment. Online-dating service OKCupid is among the 16,000 merchants using Coinbase. Previously the eight-employee startup, which launched in June 2012, had raised about $6 million of investment capital.
"We think Coinbase can significantly accelerate Bitcoin's proliferation, and as that happens the Internet will enter a new phase of invention and opportunity," said Andreessen Horowitz's Chris Dixon, who will join Coinbase's board of directors on the heels of this latest funding round. "Bitcoin is the first plausible proposal for an economic protocol for the Internet."
The Series B money will allow Coinbase to grow its staff and scale its business. As it stands, its recent growth is impressive: The company says its user base has tripled since Aug. 1, from 200,000 to more than 600,000 user accounts.
Fred Wilson of Union Square Ventures, which participated in the funding round along with Ribbit Capital, will also join the Coinbase board.
Coinbase also announced today that Gavin Andresen, the head developer of the open-source software underlying Bitcoin, is joining the company as an advisor.