With the rise in price of digital currency, Bitcoin startup Coinbase is in talks with investors on raising new round of funding at a valuation of more than $1 Billion, reported the Wall Street Journal.
According to the people in know of the deal, investors are committing to the round, which is said to be around $100 million. The deal, if sealed, would be largest founding round on record for venture-backed Bitcoin firms. However, Coinbase has not made any comment about the development.
Recently, amid a spike in bitcoin prices, Coinbase saw strong transaction volume and revenue numbers. Coinbase provides bitcoin-related services including a digital wallet for cryptocurrencies bitcoin, ethereum and litecoin. It also runs a bitcoin payment-processing platform for merchants.
San Francisco-based startup has raised about $116.5 million in total from prominent investors including Andreessen Horowitz, Union Square Ventures, DFJ, Ribbit Capital and NTT DoComo, as well as banks USAA Bank, BBVA Ventures, the San Francisco-based investment arm of Spain’s Banco Bilbao Vizcaya Argentaria SA, Bank of Tokyo Mitsubishi UFJ and NYSE.
In July 2016, Coinbase raised $10.5 million round. In January 2015, the company raised $75 million in what was at the time the largest venture fundraising for a bitcoin-related startup.
Coinbase was founded by former Airbnb engineer Brian Armstrong, now Coinbase chief executive, and former Goldman Sachs trader Fred Ehrsam, who has recently left Coinbase.
Prices on bitcoin reached nearly $2,800 in late May. During this time, bitcoin has seen a resurgence in interest in last few months.
Many experts believe that factor contributing this includes volatility in emerging market governments causing individuals to hedge against inflation or government failure. Interest surges up in bitcoin when prices go up, and then trading volume goes up. Meanwhile, there is rise of trend using bitcoin for easier cross-border purchases. There is more use of the cryptocurrency in emerging-market countries.
In April this year, Japan enacted new rules that help to make bitcoin a legitimate payment method, causing trading of bitcoin in yen to surge.
Among competitors, Coinbase is fighting out against Blockchain and Xapo Ltd.