Cryptocurrency exchange platform Coinbase launches Coinbase Ventures; to invest in early-stage cryptocurrency startups

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Updated: April 6, 2018 12:05:23 PM

Coinbase has raised over $225 million since its inception. They are being backed by investment firms like IVP (Institutional Venture Partners), Bank of Tokyo, Andreessen Horowitz, among others

Cryptocurrency exchange platform Coinbase launches Coinbase Ventures; to invest in early-stage cryptocurrency startups

One of the biggest online platforms to trade Bitcoins and other cryptocurrencies, Coinbase, has announced a new fund for early-stage cryptocurrency and Blockchain startups ‘Coinbase Ventures’. In a blogpost Head of Corp & Biz Dev and Biz Ops at Coinbase, Emilie Choi said, “We’ll be providing financing to promising early stage companies that have the teams and ideas that can move the space forward in a positive, meaningful way.”

She further wrote that at least in the beginning, the company’s goal will be to simply help the most compelling companies in the space to flourish. “This means that we don’t have the strategic requirement of formalizing partner relationships with such companies, as some corporate venture programs do. Our focus is on building strong relationships and helping to spur on the development of the ecosystem,” she added.

This will include companies that compete with Coinbase “we may be comfortable investing in companies that are potentially competitive, because it’s in everyone’s interest to see the ecosystem innovate,” Choi wrote.

For now, there are no updates on the amount of funds raised to invest in these early-stage companies or where these funds have been raised from. Though Choi said in her post that Coinbase will be keeping an eye on founders that have worked with Coinbase and will invest in ideas from their alumni network.

One of the benefits of investing in blockchain and cryptocurrency startups will help stabilize the sector. The sector has been under scrutiny from the US SEC, India’s RBI and other authoritative bodies throughout the globe.

This includes investing in companies that may potentially compete with Coinbase because “it’s in everyone’s interest to see the ecosystem innovate,” Choi added. She also said the fund will keep an eye on founders who have worked for Coinbase and “enthusiastically invest in ideas from our own alumni network.”

Coinbase was founded in 2012 by Brian Armstrong and Fred Ehrsam. The company is an online platform that allows merchants, consumers, and traders to transact with digital currency. It allows its users to create their own bitcoin wallets and start buying or selling bitcoins by connecting with their bank accounts. In addition, it provides a series of merchant payment processing systems and tools that support many highly-trafficked websites on the internet. Further they have raised over $225 million since its inception. They are being backed by IVP (Institutional Venture Partners), Bank of Tokyo, Andreessen Horowitz and others.

In a CNBC interview, COO of Coinbase Asiff Hirji said that as more investors take interest in the sector, this will dampen volatility to some extent. He further said that, there has been a tremendous take up on the fund, well beyond anything they were expecting and that it “confirmed what we thought, that there is actually more demand on the investor side than on the trader side.”

As Coinbase plans not to add any more cryptocurrencies, for now, on its exchange. Investing in startups will help them claim promising tokens.

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