Atlanta-based BitPay, which seeks to be the payment processor of choice for merchants accepting virtual currencies like bitcoin, received a $30 million cash infusion May 13, a month after announcing moves into South America and Europe.
The venture round was led by London-based Index Ventures and included partners such as Horizon Ventures, Hong Kong billionaire Li Ka-shing’s fund, and British mogul Richard Branson, among many others. It follows a previous round that raised $2.7 million in 2012.
The company plans to use the funding to hire about 70 new workers across offices in Atlanta, San Francisco, Buenos Aires and Amsterdam, where the firm opened its European headquarters in April.
BitPay has signed up more than 30,000 merchants including TigerDirect, Shopify and WordPress, and the company’s technology processes bitcoin payments worth more than $1 million per day.
For merchants, BitPay executives say accepting bitcoin is a no-brainer. It protects them from fraud, fees and from consumer payment disputes, known in credit-card industry parlance as “chargebacks.”
In a note explaining its play, Index Ventures likened its investment in BitPay with its backing of Skype in the early days of the voiceover IP industry: It’s a new category built on top of an existing platform. Just as phone lines didn’t disappear, Index said credit cards will still play a major role in payments but that bitcoin has specific advantages for e-commerce.
“It’s the ideal system for micropayments (typically less than $1); it removes cross -border fees (i.e. when sending money abroad, whether to relatives or to pay suppliers); it’s also very useful for making payments in territories with underdeveloped or unstable monetary systems, which are poised to leapfrog entire technological stages; and for embedding payments acceptance into the architecture of the Internet itself,” the note reads.
Read more about BitPay’s expansion into Argentina and its business operations in this Global Atlanta story.
Read the full note from Index Ventures on why it’s backing BitPay here.