Coinbase Caught Up in Bitcoin Blowout

What happens when you’re facilitating the trade of a product that is experiencing extreme hockey stick growth? You expand your team and operations as quickly as possible.

This is what Coinbase, an exchange platform for bitcoin, ethereum, and litecoin, is experiencing. The California-based company will have plenty of war stories to tell once this season mellows out. After bitcoin blew past $16,000 earlier today*, the company tweeted:

The New York Times, in its piece Coinbase: the Heart of Bitcoin Frenzy, explained Coinbase’s popularity over other cryptocurrency trading platforms. Author Nathaniel Popper said, “Coinbase has been the dominant place that ordinary Americans go to buy and sell virtual currency. No company had made it simpler to sign up, link a bank account or debit card, and begin buying Bitcoin.”

Because of this growth, Coinbase now has more customers than E-Trade and Charles Schwab, having increased by 7.8 million accounts since January of this year. However, Coinbase CEO Brian Armstrong sees past the hype into a more stable future for cryptocurrency. He told the New York Times that bitcoin is “probably a little bit too focused on the price or people trying to make money.” He added, “The thing I’m passionate about with digital currency is the world having an open financial system.”

Coinbase isn’t the only one experiencing growing pains. Global banking company Revolut, which launched a cryptocurrency trading feature today, sent out this series of Tweets this morning:

Founded in 2012, Coinbase demoed Instant Exchange at FinovateSpring 2014. In August, the company became a fintech unicorn after it closed a $100 million round of Series D funding. At that point, Pitchbook estimated Coinbase’s value to be $1.6 billion.


*Note: Earlier today Bitcoin’s value spiked over $17,300 but at press time sits at $17,099.

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Around the web

  • PayNearMe helping New Yorkers pay traffic tickets using cash.
  • Coinbase cofounder and CEO Brian Armstrong reminds users to ‘invest responsibly.”

This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

Coinbase Names Asiff Hirji as President and Chief Operating Officer

Bitcoin exchange Coinbase has a new president, Asiff Hirji, who will also serve in the newly-created position of chief operating officer. Formerly of Hewlett-Packard and Andreessen Horowitz, Hirji joins the company at a time of soaring interest in bitcoin and digital currencies, and will bring his expertise in managing large investment platforms and brokerage firms to Coinbase at a key moment in the company’s growth.

Writing at The Coinbase Blog this morning, co-founder and CEO Brian Armstrong said, “Coinbase is moving into an exciting phase of our journey. Asiff’s knowledge of traditional financial services, as well as his deep technical expertise, makes him the perfect person to guide our operations as we grow into new markets and products.”

“Asiff is an elite operator, with fantastic domain expertise from Ameritrade, and a deep technical background,” Andreessen Horowitz General Partner Ben Horowitz said, calling Coinbase’s new executive “the perfect fit.”

In addition to his experience with Hewlett-Packard and Andreessen Horowitz, Asiff Hirji (pictured) has served as a senior advisor at Bain Capital, founded private investment and operating company Inflekxion, and is a director at number of technology firms including Eze Software Group, TES Global Limited, RentPath, and Saxo Bank. With a BSc in Computer Science from University of Calgary, he earned an MBA from the Ivey Business School at Western University in London, Ontario, Canada.

“Coinbase is uniquely positioned like no other company to capitalize on the burgeoning crypto-economy,” Hirji said. “Its breadth of offerings, global footprint, and unique capabilities mean that it will continue to be the first place that retail and institutional investors look when they invest in cryptocurrencies.”

As such, Hirji told The Wall Street Journal that the challenge for Coinbase will “definitely” be growth. He said that both finding engineers that are well-versed in cryptocurrency technologies and dealing effectively the “patchwork of regulations around bitcoin” have been among the challenges to bitcoin businesses that “have yet to be resolved.”

With more than 10 million customers served, and more than $50 billion in digital currency exchanged, Coinbase demonstrated its Instant Exchange technology at FinovateSpring 2014. Earlier this month, the company introduced Coinbase Custody, a new solution to help institutional investors securely store digital assets. In August, Coinbase closed a $100 million Series D funding round led by IVP that took the company’s total capital to $217 million and an estimated valuation of $1.6 billion.

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  • Coinbase Names Asiff Hirji as President and Chief Operating Officer.
  • ID.me Teams Up with General Motors to Support Military Discount Program.

Around the web

  • Forrester Research names TIBCO a leader in Enterprise Data Virtualization.
  • Entrust Datacard acquires cloud cryptographic service provider, Trustis Limited.
  • Finastra finishes testing to provide connectivity to the European instant payments infrastructure.
  • The Silicon Review features IDology in its list of the 50 fastest growing tech companies in 2017.
  • Credit Strategy reviews how Intelligent Environments won the Best Collections Technology Award.
  • savedroid initiates the first German ICO to drive broader blockchain inclusion.
  • Voleo enables cryptocurrency trading on its SimuTrader App.

This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

Coinbase Custody Helps Institutional Investors Securely Store Digital Assets

 

Who knows how much more appreciation in the price of bitcoin will be required to encourage notorious crypto-currency skeptic and JP Morgan CEO Jamie Dimon to endorse investing in digital assets. But when he does, a new company launched by Coinbase called Coinbase Custody will be there to make sure he does it the right way.

“By some estimates there is $10B of institutional money waiting on the sidelines to invest in digital currency today,” Coinbase CEO and co-founder Brian Armstrong wrote in a blog post this month. He highlighted the number of hedge funds that have been set up solely to trade and invest in bitcoin and other digital assets, as well as the growing number of family offices, sovereign wealth funds, and others examining ways to add digital currencies to their portfolios. He also noted that the primary obstacle to broader investment in these assets is the ability to store client’s digital assets safely.

With Coinbase Custody, Armstrong has set out to meet a set of factors – ranging from strict financial controls with audit trails to multi-user accounts and exceptional cyber and physical security – he believes FIs require in order to trust a digital asset custodian. He pointed out that because Coinbase “already store(s) billions of dollars worth of digital assets” for its customers – and currently serves “thousands of institutions” on its U.S. digital currency exchange, GDAX – Coinbase is an ideal partner for FIs looking to securely store digital assets. “Our goal with Coinbase Custody is to help dramatically accelerate the flow of institutional money into digital currencies over the coming years,” Armstrong wrote.

Institutions that sign up for Coinbase Custodian will get access to an early version of the solution to be released in 2018. The product is exclusively for institutional investors with a minimum of $10 million in deposits. Coinbase presently charges an initial set-up fee of $100,000 plus a fee of 10 basis points per month on assets stored.

Founded in 2012 and headquartered in San Francisco, California, Coinbase demonstrated its Instant Exchange platform at FinovateSpring 2014. In August, the company closed a $100 million Series D round led by IVP, which took Coinbase’s total funding to $217 million and a valuation of $1.6 billion. Named to KPMG/H2 Ventures Fintech 100 for 2017’s Leading 50, Coinbase introduced its Instant Purchases option in October, which enables users to buy digital assets directly using a U.S. bank account.

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  • Coinbase Custody Helps Institutional Investors Securely Store Digital Assets
  • Kabbage Expands Small Business Funding with $200 Million Credit Facility.

Around the web

  • Overbond offers U.S. corporate issuers and institutional investors real-time access to its platform.
  • PayPal and Synchrony Financial expand strategic consumer credit relationship.
  • U.K.-based Featurespace to open office in Atlanta in November.
  • WealthForge Debuts Its First Regulation A Offering with New Investor Workflow
  • GoBankingRates features Blend, Unison, and Ellevest in its 10 Startups to Watch in 2018 list.

This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

KPMG, H2 Ventures Unveil Fintech 100 for 2017

It’s that time of the year once again: KPMG and H2 Ventures have teamed up to introduce their Leading Global Fintech Innovators roster, the Fintech 100 for 2017. The judges for this year’s Fintech 100 included more than 20 professionals from KPMG and other organizations with expertise in IT, data analytics, capital markets, financial services, and more.

This year 11 Finovate/FinDEVr alums made the Leading 50, with another 12 alums making the Emerging 50. New entrants to the KPMG/H2 Ventures roster include SoFi and Revolut among the Leading 50. All 12 the alums on the Emerging 50 are making their first appearance. See the full list.

Some of the highlights from the 2017 Fintech 100 include the observation that five of the roster’s top 10 companies are from China, as are the top three companies on the list: Ant Financial, ZhongAn, and Qudian (Qufenqi). The U.S. has a pair of companies in the top five: Oscar and Avant, and Europe and the U.K. each have one company in the top ten: Kreditech and Atom Bank, respectively.

Speaking of Asia, the Asia-Pacific region has 30 fintech companies in the top 100. The United States has 19 companies – the most from any single country – and the U.K. and EMEA areas have 41 companies in the list. The U.K. and EMEA region are also responsible for the highest number of companies on KPMG/H2 Ventures’ Emerging 50 list with 26.

With regard to sectors within fintech, the Fintech 100 breaks down as follows:

  • 32 lending companies
  • 21 payments companies
  • 14 transaction and capital markets companies
  • 12 insurance/insurtech companies
  • 7 wealth management/wealthtech companies
  • 6 cybersecurity/regtech companies
  • 4 blockchain/digital currency companies
  • 3 data and analytics companies

Alums from the Leading 50

Alums from the Emerging Stars

Finovate Alumni News

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  • Wave Brings Business Services to Royal Bank of Canada’s Online Banking Platform
  • Finicity Teams with DataVerify.
  • Ripple Entices Banks with New Accelerator Program.

Around the web

  • Tradeshift joins the Hyperledger Board.
  • DAVO to offer app to Poynt merchants via Poynt’s App Marketplace
  • Ondot, Elan provide two-way fraud alerts for My Mobile Money app.
  • EverSafe wins a spot in Fidelity’s list of “8 financial tips for new widows.”

This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

Finovate Alumni News

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  • Enabled by AI, Self-Service Is the Future of Banking

Around the web

  • eWise offers free access to Categorization-as-a-Service (CaaS) API.
  • Mastercard to introduce contactless payments in Myanmar courtesy of partnership with Co-Operative Limited Bank (CB Bank).
  • Michigan-based Marshall Community Credit Union hires Insuritas.
  • Tesobe announcing APIDays Berlin on 7 & 8 November
  • Pascal Gauthier nominated President of cryptocurrency & blockchain security company Ledger
  • Hyundai Capital America joins the AutoGravity car shopping and financing platform
  • Coinbase announces Ethereum & Litecoin vaults
  • Pirean’s Access: One wins Cloud Security Product of the Year at the 2017 Computing Cloud Excellence Awards.

This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

With $100 Million in Fresh Funding, Coinbase Joins Unicorn Club

Digital currency wallet Coinbase has taken the leap to become a unicorn today. The San Francisco-based company announced it has received $100 million in Series D funding led by IVP. Other investors include Spark Capital, Greylock Partners, Battery Ventures, Section 32, and Draper Associates.

Today’s investment brings the company’s total funding to $217 million; Pitchbook estimates Coinbase is now valued at $1.6 billion. This makes the company one of only a handful of unicorns (startups with more than $1 billion valuations) in fintech and crowns Coinbase as the first bitcoin unicorn.

Since it was founded in 2012, Coinbase has now exchanged more than $25 billion worth of digital currency for its clients. Almost $15 billion of this occurred in the first half of 2017 alone. The company plans to put the new funds to work in three ways. First, Coinbase plans to expand its engineering and customer support teams. Second, it will open a GDAX office in New York City to better position itself to serve professional traders. Third, it will invest in the digital currency Toshi to build it into a global payments network.

Coinbase, which supports Bitcoin, Ethereum, and Litecoin in 32 countries, offers three main products:

  • Coinbase: an exchange platform for digital currency
  • GDAX: exchange platform for professional U.S. traders and institutions
  • Toshi: a browser for the Ethereum network

The company notes that with this funding, it is preparing to transition into phase three of its “secret master plan,” that is, it plans to build a consumer interface for decentralized digital currency apps. Coinbase, which demoed Instant Exchange at FinovateSpring 2014, has made headlines twice today– the first instance highlighting its View Balance feature in partnership with Fidelity Labs.