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Emerging Payments

BitPay, a Bitcoin Payments Processor, Adds Investors

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BitPay, which processes payments for merchants in the decentralized digital currency Bitcoin, said Monday it recently secured capital from a group of investors that includes Ben Davenport, a software engineer at Facebook; A-Grade Investments, a venture-capital firm that includes Ashton Kutcher; and Trace Mayer, an entrepreneur and blogger.

Participants in the round's first half invested at least $510,000 apiece, and investors in the round's second half have funded the company in amounts that the company has not disclosed. "It's still all the same seed round," says Anthony Gallippi, the company's co-founder and chief executive.

BitPay will use the money to hire up to seven new employees in such areas as software development, sales and marketing, adds Gallippi, who says the startup will wait until later this year before soliciting subsequent rounds of capital.

The funding comes amid a growth spurt by the startup, which recently moved its headquarters to Atlanta from Orlando. WordPress, the world's most popular web publishing platform, said in November that customers could use Bitcoin in lieu of credit cards or PayPal to pay for upgrades and that BitPay would process payments on the company's behalf.

In February, file-sharing website Mega said it would accept bitcoins to pay for storage subscriptions after PayPal stopped handling payments for the service. Hosting.co.uk, one of the vendors that market Mega's cloud-storage services, began using BitPay in connection with Mega's announcement.

In all, roughly 3,200 merchants worldwide use BitPay's platform to process Bitcoin payments. "The pace at which people are signing up continues to accelerate," says Gallippi, who adds that BitPay processes roughly $500,000 in transactions a month, a total he expects to double in the coming months.

In February, BitPay processed roughly $700,000 in transactions, an all-time high for the firm, according to Gallippi.

"A lot of the sectors are coming on, although it's still 90% e-commerce," Gallippi says, citing such businesses as Pizzaforcoins.com, which allows consumers to use bitcoins to pay for pizza from Domino's, Pizza Hut and Papa John's; and Bitcoinstore, an online seller of computers and electronics that opened for business recently with the promise of undercutting competitors who accept only conventional payments.

BitPay's new investors join a group of funders that includes Shakil Khan, who helped launch tech startup Spotify; Barry Silbert, the founder of SecondMarket, an online broker-dealer that creates markets for alternative investments; and Roger Ver, who has backed several Bitcoin startups.

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