Bitcoin Startups Get Their Own Silicon Valley Accelerator
Bitcoin may be more popular -- and pricey -- than ever before, but its entrepreneurial ecosystem is still a work in progress. Now Plug and Play Tech Center, which has three locations in Silicon Valley and which was a seed investor in PayPal, has announced the opening of an accelerator program exclusively for Bitcoin-related startups.
The program, which is set to induct its first class of 10 startups in January 2014, will last for three months, with the option of extending a startup's stay to six months if it needs the extra time. The accelerator will be located in Sunnyvale, Calif., where Plug and Play Tech Center has its headquarters.
Each participating startup will receive a $25,000 seed investment in exchange for a 5 percent equity stake, Saeed Amidi, the founder and chief executive of Plug and Play Tech Center, tells Entrepreneur.com. "In special cases, we can go up to $100,000," he says.
In December, Plug and Play Tech Center will hold an expo focusing on financial technology and digital currencies. This will serve as a sort of prelude to the Bitcoin accelerator, which will begin accepting applications once the expo concludes.
The seven-year-old Plug and Play Tech Center is no stranger to startup investment; in the course of more than half a decade, it has accelerated 1,500 early-stage companies, by Amidi's reckoning. It also hosts a weekly Bitcoin meetup that is the largest in Silicon Valley.
So why is now the right time to put investment dollars into the Bitcoin space? "We've been following Bitcoin for two years, and we still have not totally figured it out yet," Amidi admits. "But nevertheless we think there is so much traction and so much interest [in the marketplace] that we want to be involved."
The value of a single bitcoin is now about $420, an all-time high that would have been inconceivable a few weeks ago. As reported previously, this stratospheric price has a lot to do with increased interest from China. Indeed, Scott Robinson, who will be heading Plug and Play Bitcoin, was unavailable to speak with Entrepreneur.com, as he is currently attending Asia's first Bitcoin conference, Bitcoin Singapore.
"We've pulled together a great community of Bitcoin users, enthusiasts, investors and entrepreneurs, so we feel as though we have a good understanding of the players in the space and the trends we're witnessing from hardware to regulation to new disruptive payment solutions," Robinson said in a statement.
In addition, Plug and Play Tech Center intends to invest in five more Bitcoin startups outside of the accelerator program. It will invest in two or three before the end of 2013, Amidi says.
Amidi has no doubt that Bitcoin is more than a passing fad. "I think it will go through some ups and downs, but it's going to stay around for a long time," he says. "But how big it's going to be, I don't know."
Brian Patrick Eha is a freelance journalist and former assistant editor at Entrepreneur.com. He is writing a book about the global phenomenon of Bitcoin for Portfolio, an imprint of Penguin Random House. It will be published in 2015.