Last updated on December 2nd, 2014 at 03:13 pm
ChangeTip, the popular social media tipping platform, announced today that it has raised a $3.5 million Seed Round. Bitcoin investment firm Pantera Capital is leading the round, with participation from Bold Start Ventures, DCG, CryptoCurrency Partners, 500 Startups, and others. This latest round of funding will be allocated towards product enhancement, platform engineering development, and user acquisition.
ChangeTip is a Bitcoin-enabled social media tipping platform by which users can send any amount of money over 35 different social media platforms or content showcase channels (including Twitter, YouTube, Reddit, and GitHub). Users can reward content creators with small amounts of money by way of a simple online comment or reply, similar to how one would tip a street musician for an impressive performance or a waiter for quality service.
Typical tipping events include: people tipping one another for comment appreciation, or as a gift; people tipping to reward insightful publications or worthy content marketing material; tipping favorite musicians, actors, writers or other public figures; tipping songs or drawings; tipping in place of the “Like” or “Upvote” buttons to give the action practical meaning; tipping as a way to repay small debts; and tipping as a way to make small donations to charities and other non-profit entities.
“The social media phenomenon of ‘tipping’, or expressing one’s appreciation over the Internet with small monetary or other digital gifts, is building momentum,” said Nick Sullivan, ChangeTip founder and CEO. “With ChangeTip, a million users can tip $0.01 and the content creator can collect his $10,000 – an impossibility in a legacy payments world.”
Chief Executive Officer Nick Sullivan is a four time VP of Engineering, producing million dollar projects for Yahoo!, Wikia, and Krux. Chief Operating Officer John Q. Smith is a Silicon Valley veteran with two successful exits, wielding over 20 years of software engineering and team building expertise. Each member of the company’s four-person core has worked together on previous projects, indicating strong team cohesion, and all bring at least ten years’ experience in application development.
Pantera Capital CEO Dan Morehead elaborated, “Tipping is likely to be Bitcoin’s first killer app – seamlessly integrated into social media, enabling people to send money in a free, fun, instantaneous way without borders or minimums. This could have a huge impact on Bitcoin adoption. Years ago I received my first bitcoins free from Gavin Andresen’s Bitcoin Faucet. When we look back in a year’s time, there is a good chance that the majority will have received their first bitcoins free via ChangeTip.”
ChangeTip connects over 50,000 social media or content showcase accounts. The service facilitates transaction sizes ranging from $0.00001 up to $100, and since inception, the company’s user base has grown 30% month-over-month. High demand plus ease of use have ignited its recent viral adoption and use on Reddit and Twitter.
Bitcoin’s advantages include global reach, security due to decentralization, speed, negligible fees, and no minimum transaction size. Credit cards, SWIFT, ACH, SEPA, and other legacy payments rails maintain hard fee floors and minimum transaction speeds, limiting the ability to transfer value optimally to others. At certain price points, sending money through these rails is too expensive, too slow, or too inconvenient.
Because of these constraints, tipping over YouTube requires a $0.21 +5% fee, yet it’s becoming increasingly apparent that users are willing to tip less than minimum fees. If a million viewers wish to tip $0.01 but not more than $0.22 for a viral video, this revenue is lost for the content creator.