Bitcoin-based Marketplace OpenBazaar Raises $3 Million in New Funding
OB1, the company behind the bitcoin-powered decentralized marketplace OpenBazaar has raised $3 million in new funding, furthering the development of an eBay-like marketplace detached from the trappings of intermediaries or fees associated with PayPal and payment cards.
Announced yesterday, OpenBazaar’s latest round of funding was led by BlueYard Capital, a Berlin-based venture capital firm that focuses on early stage funding of decentralized-centric startups.
The VC firm points to existing platforms such as Amazon, Alibaba and eBay as centralized, controlled marketplaces that are vulnerable to external influences, ultimately posing a threat to free trade.
“Their terms, algorithms and pricing structures can put merchants and buyers at a significant disadvantage,” wrote BlueYard in a blog following its backing of OpenBazaar. “They (the likes of Amazon and eBay) can also lock out merchants and buyers that happen to be outside of their scope of operations.”
As an open, peer-to-peer network, OpenBazaar is a platform that directly connects marketplace participants with bitcoin as the transactional currency.
“There is no gatekeeper that can influence who can participate in the marketplace, what goods are sold and at what price,” the Berlin-based investor, which had raised $120 million as of January, 2016 to fund startups, said of OpenBazaar. “There is no central entity that can dictate search/ranking algorithms, control data of merchants and buyers, or charge any fees.”
Andreessen Horowitz and Union Square Ventures, two VC giants with a history in backing decentralized ventures including bitcoin and blockchain startups also participated in the round.
The two VC firms also raised $1 million from an earlier seed round in May 2015 before the public launch of OpenBazaar 1.0 beyond its beta phase in April this year.
Following his firm’s second investment in the marketplace, Brad Burnham, managing partner at Union Square Ventures revealed the broad scope and reach of a decentralized, no-boundaries marketplace.
He stated:
The reach and diversity of OpenBazaar usage shows the potential for decentralized applications: within a week of its release, buyers and sellers from 129 countries joined the network and began transacting with each other for free.
“We believe OpenBazaar has an opportunity to fundamentally transform the market structure of commerce,” he added, whilst welcoming BlueYard’s participation as a co-investor.
The new round of funding will help continue development of the open-source software and code by OB1. The developers unveiled OpenBazaar’s roadmap earlier this year and followed it soon after by revealing plans for the next version and release of the platform, OpenBazaar 2.0.
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