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Menlo Ventures Leads $40 Million Series B in Bitcoin Firm BitPay

Last Updated March 4, 2021 5:06 PM
Josiah Wilmoth
Last Updated March 4, 2021 5:06 PM

One of Silicon Valley’s oldest venture capital firms is dipping its toe into the blockchain ecosystem with an investment in cryptocurrency payment processing startup BitPay.

The investment, announced on Monday, came as part of a $40 million funding round, the largest in the Atlanta-based company’s nearly seven-year history. It also constituted the first time Menlo has acquired a stake in a cryptocurrency-related startup.

Founded in 1976, Menlo was one of the first Silicon Valley venture capital firms and has counted among its portfolio companies tech darlings such as Uber, Roku, and Tumblr. However, it had not yet joined so many of its peers in gaining exposure to the burgeoning blockchain sector — until now.

The funding round was BitPay’s first since 2014, when it raised $30 million in a round that included Virgin Group founder Richard Branson, AME Cloud Ventures, and Peter Thiel’s Founders Fund.

According to tech outlet Recode , several high-profile venture capital firms passed on the current funding round because they believe the prevailing trends in the cryptocurrency industry — that cryptoassets are primarily commodities, not currencies — create uncertainty for the payment processing firm, despite its leading role in this sector.

The publication also noted that BitPay had made the unusual move of announcing the funding round before it had closed, which some observers took as a potential indication that the firm was having trouble reaching its target. BitPay CEO Stephen Pair denied these rumors.

“We wanted to make sure that anybody who wanted to participate could, and announcing it serves that purpose,” he said, noting that the company raised $40 million despite initially targeting $30 million and has been profitable for a year and a half.

And while Bitcoin’s transaction fees have declined over the past several months, BitPay — which processed more than $1 billion worth of payments in 2017 — has begun making moves to support additional payments-focused cryptocurrencies. Last week, the company upgraded its merchant tool to accept Bitcoin Cash payments, and it has said it will add support for more altcoins in the future.

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