Some of the biggest names in venture capital are getting behind a maker of underground bitcoin vaults, the latest bet to bolster the digital currency.
Xapo said Tuesday it raised an additional $20 million in funding, doubling the amount it raised earlier this year. The investment was co-led by Greylock Partners and Index Ventures and includes Emergence Capital Partners, Max Levchin, the co-founder of PayPal, Yuri Milner, the Russian billionaire investor, and Jerry Yang, co-founder of Yahoo. Reid Hoffman, a partner at Greylock, and Mike Volpi, a partner at Index, will join Xapo’s board as observers.
The latest investment values Xapo at roughly north of $100 million, according to a person with knowledge of the matter. Wences Casares, Xapo’s CEO, declined to comment on the valuation.
Xapo, which is trying to legitimize and popularize bitcoin by offering services to securely store and transact the digital currency, has now raised $40 million. Its previous round, announced in March, was led by Benchmark. The latest cash injection, stuffed with top-tier tech investors, reflects ongoing enthusiasm in Silicon Valley for bitcoin-related startups, despite ongoing concerns about the future and volatility of the currency. After surpassing a value of $1100 late last year, the currency now trades just north of $600.
The investment puts Xapo in an elite circle of bitcoin startups now worth nine figures. In December, Andreessen Horowitz led a $25 million round in Coinba<x>se, a bitcoin wallet company. The round valued Coinba<x>se at $140 million, according to The Wall Street Journal.
Casares, a serial entrepreneur from Argentina, said he decided to accept additional capital after fielding interest from investors following the announcement of his first round. He plans to use the money to quickly build out his staff. With about 12 employees, he hopes to roughly quintuple his payroll by the end of this year.
The company currently offers two main services: a vault for people to store their bitcoins and a wallet to facilitate transactions.
In a blog post, Hoffman outlined his very bullish case for bitcoin, hinting that the firm could make future investments related to the currency:
“As an investor and technologist, I am interested in bitcoin on three levels: As an asset, (i.e. a digital alternative to gold); as a currency (to create a new transactional l<x>ayer on the internet); and as a platform (to build alternative kinds of financial applications).”
