Boston-based Circle Internet Financial Ltd, which develops tools to enable consumers to use virtual currency Bitcoin announced on Wednesday that it has secured $17 million from venture capitalists to help finance its new service targeted for ordinary consumers.
The latest funding round, which is a sign that sophisticated investors are developing interest in the sector, brings the total amount that Circle has raised so far to $26 million. It plans to roll a Bitcoin account that is aimed at consumers, not people who intend to trade Bitcoins for dollars and other currencies.
The platform will allow consumers to deposit normal currency in an account which will be converted into Bitcoins, which can be used to receive and send Bitcoins for free. The company will earn from the transaction fee charged on the deposit.
“It’s oriented around using Bitcoin as a spending platform,” said Chief Executive Officer Jeremy Allaire. Circle currently has 23 employees, a figure the company intends to double by the end of this year.
Allaire added that financiers were “very eager” to sink more funds into Circle, although the company has only spent less than 25 percent of its initial funding of $9 million that it raised last year.
“Investors see this market as a very significant global market and we are emerging as a highly credible company,” said Allaire, according to Wall Street Journal.
Bitcoin, a digital currency launched in 2009, has become popular, with merchants selling everything from candy to cars using the currency due to lower fees compared to debit cards.
Circle raised funds in the latest round from investors such as San Francisco-based hedge fund Pantera Capital and Fenway Capital LLC. So far, other investors who have financed the startup include Accel Partners, Breyer Capital, Oak Investment Partners, General Capital Partners and the Bitcoin Opportunity Fund.
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