If back in the beginning of May, the almost one year-old start-up Coinbase was receiving the largest funding ever given to a Bitcoin company – an amazing $5 million -, today it’s obvious that the investment made by Union Square Ventures was totally worth it.
A month and a half ago, while talking with The Wall Street Journal, Coinbase’s founders Fred Ehrsam, 24 years old, and Brian Armstrong, 30 years old, were super pleased with the investment in their San Francisco based company. Back then, they needed “10 people” to work with them and had a lot of operating costs to cover.
Currently, the online platform Coinbase is a true success, recommended by some well-known brands and cryptocurrency experts. Users quickly started to see the benefits of Coinbase, which allowed them to safely store Bitcoin in a digital wallet and use it to pay for products or services. The fact that the platform has over 300 merchants and websites working with it is, obviously, a plus. The pages Reddit and OkCupid are just some good examples.
Back in April, even before the buttload of money they received, Coinbase’s co-founders said their company gathered about 116,000 members who had converted $15 million of real money into Bitcoin. According to the former Goldman Sachs trader Fred Ehrsam and to the software engineer Brian Armstrong, Coinbase’s users were growing at a weekly rate of about 12 percent.
And what about the point of view of the investors? Well, Fred Wilson, from Union Square Ventures, says that Coinbase’s growth is something “very rare”. In his opinion, Bitcoin is a game-changer for the business world and the tech community. He even gave an example, using hackers to make a point. For Fred Wilson, they “are like the animals that can detect a storm coming or an earthquake. They just know, even though they don’t know why, and there are two big things hackers are excited about now and can’t articulate why: Bitcoin and 3D printing”.
According to Fred Wilson, after a lot of research, Union Square made its first investment in Coinbase because they “really liked their approach to the business and the product they built”, he says, claiming that the co-founders of the start-up are “very pragmatic, level-headed engineers”.
For Union Square Ventures, investing in Coinbase was “less risky” than other options. “Digital currency, and Bitcoin specifically, is a very interesting area where if one were to get it right, the upside would be enormous”, Fred Wilson adds. However, if everything goes according to the plan, Coinbase will be worth a lot of money one day, much more than “just” $5 million.
