While the price of bitcoin continues to loom around the $ 7,000 range, Bitcoin payments seem to be holding strong in various parts of the world. In particular, emerging markets in Asia looking to facilitate low-cost payment solutions for cross-border commerce are benefiting from cryptocurrency transactions.
This has become apparent as BitPay, the largest global blockchain payment provider, just closed its $ 40 million extended Series B funding round. Notable new investors include Menlo Ventures, along with a number of investors based in Asia like Capital Nine, an Asian fintech corporation. Other participants from the region include Christopher Klaus, the founder of Internet Security Systems (ISS), and Alvin Liu, co-founder of Tencent.
To date, BitPay has raised a total of over $ 70 million in capital. In 2014, BitPay raised $ 30 million in its Series A round from investors including Index Ventures, Founders Fund, Felicis Ventures, RRE Ventures and Sir Richard Branson.
“BitPay had a record 2017 as we processed over $ 1 billion in bitcoin payments. Since then, we’ve brought on new investors who can help BitPay scale globally to meet customer demand,” said Stephen Pair, CEO of BitPay. “Our goals include key hires in engineering and regulatory licensing, as well as expansion into emerging markets in Asia — one of BitPay’s fastest-growing regions for transactions and wallet adoption.”
Aquiline Capital Partners initially led the Series B round but extended it due to increased investor demand.
“We were only planning to raise a $ 30 million round, but due to high demand, we extended the round to $ 40 million in January. Interestingly enough, this was also during the same time the price of bitcoin started to drop,” BitPay’s chief commercial officer, Sonny Singh, told Bitcoin Magazine. “Moreover, this was also the first time Menlo Ventures has ever made an institutional crypto investment.”
BitPay now joins the Menlo portfolio alongside leading companies such as Uber, Betterment, Roku, BlueVine and Warby Parker.
“We gravitated towards BitPay because we felt the company had identified a killer use for crypto in facilitating low cost payment solutions for cross-border commerce and B2B payments, which is a massive market poorly served by the existing payment rails,” said Tyler Sosin, a partner at Menlo Ventures, in a statement. “We are impressed with the company’s execution — it has demonstrated extremely efficient growth and a stickiness with merchants and consumers that is the hallmark of many great payment service providers.”
Why BitPay’s Funding Round Is So Impressive
The key factor behind the $ 70 million in capital raised has to do with the technology. Using Bitcoin as a form of payment, rather than as a trading asset, is revolutionizing B2B payments for cross-border commerce — particularly in Asia.
“Bitcoin’s popularity is spreading rapidly throughout Asia and BitPay has an opportunity to extend its technology solutions across Asia,” said Sam Lin, director of Capital Nine, in a statement. “BitPay’s cross-border payment solution helps businesses pay or receive international payments faster and more economically.”
Last month, BitPay announced a partnership with Bithumb, one of the world’s largest crypto exchanges. BitPay and Bithumb have since launched a blockchain-based, cross-border payment solution to help South Korean businesses pay and receive international payments in a faster and more cost-effective manner than traditional bank wires.
Bitcoin and Bitcoin Cash payments dramatically reduce the friction, cost and time of cross-border business-to-business payments. Businesses that select the BitPay solution pay a fee of 1 percent per transaction and receive the cross-border confirmation in one business day. The average bank wire to or from South Korea could take three to five business days and could cost approximately 4 percent, depending on the foreign exchange rates and each bank’s wire rates.
Moreover, the security behind Bitcoin payments is also impressive, as all transactions are recorded on the blockchain. This notion appealed to one of BitPay’s newest investors, the renowned security expert Christopher Klaus. Klaus founded Internet Security Systems (ISS) and turned it into one of the first large internet security companies, which was sold to IBM for $ 1.3 billion in 2006.
“Security is extremely important to the blockchain network and BitPay,” said Klaus, in a statement. “I have been watching the cryptocurrency space and believe BitPay is able to disrupt the financial services worldwide through payment processing and cross-border payments in large part because of the security built into blockchain.”
As a result of the technology provided by BitPay, hundreds of thousands of businesses around the world are now able to accept bitcoin payments. Popular brands like Microsoft, Newegg, Namecheap, Gyft, Takeaway.com and Virgin Galactic use BitPay. The BitPay Wallet consumer adoption is also growing, with a monthly average of more than $ 3 billion in transactions. And as more attention is focused on bitcoin as a form of payment, rather than an asset for trading, its value could increase dramatically in terms of revolutionizing payment systems.
This article originally appeared on Bitcoin Magazine.