Coinbase joins unicorn club with $100m funding, partners with Fidelity
Welcome to unicorn club
Digital currency wallet Coinbase has taken the leap to become a unicorn, writes Finovate (Banking Technology‘s sister company). The San Francisco-based company announced it has received $100 million in Series D funding led by IVP.
Other investors include Spark Capital, Greylock Partners, Battery Ventures, Section 32, and Draper Associates.
The investment brings the company’s total funding to $217 million; Pitchbook estimates Coinbase is now valued at $1.6 billion. This makes the company one of only a handful of unicorns (start-ups with more than $1 billion valuations) in fintech and crowns Coinbase as the first bitcoin unicorn.
Since it was founded in 2012, Coinbase has now exchanged more than $25 billion worth of digital currency for its clients. Almost $15 billion of this occurred in the first half of 2017 alone. The company plans to put the new funds to work in three ways. First, Coinbase plans to expand its engineering and customer support teams. Second, it will open a GDAX office in New York City to better position itself to serve professional traders. Third, it will invest in the digital currency Toshi to build it into a global payments network.
Coinbase, which supports Bitcoin, Ethereum, and Litecoin in 32 countries, offers three main products:
- Coinbase: an exchange platform for digital currency;
- GDAX: exchange platform for professional US traders and institutions;
- Toshi: a browser for the Ethereal network.
The company notes that with this funding, it is preparing to transition into phase three of its “secret master plan”, that is, it plans to build a consumer interface for decentralised digital currency apps.
Coinbsae was founded in 2012 and is headquartered in San Francisco, California. It announced a pilot integration with Western Union and added support for Litecoin earlier this year. It also launched its open source, combination messaging app and ethereum wallet, Token, in spring.
Among the company’s investors are Andreessen Horowitz, Draper Fisher Jurvetson (DFJ), and Bank of Tokyo-Mitsubishi.
Brian Armstrong is co-founder and CEO.
Partnership with Fidelity
The innovation division of Fidelity Investments, Fidelity Labs, has released a new balance viewing feature for investors in partnership with Coinbase.
The move may be a small step for Fidelity brokerage clients who want to see their digital currency assets alongside their other investments. But it is an interesting sign from a company that helped drive mass adoption of and investment in another revolutionary asset class – mutual funds – more than two decades ago.
As project manager Kristen Stone notes at the Coinbase blog, the view balance feature was tested on Fidelity employees with digital currency accounts at Coinbase earlier this year. The popularity of the feature led Fidelity to expand the offering to all its customers, which Stone called a testament “to the continued commitment of traditional financial institutions to adopt digital assets and widen access for customers”.
Linking Coinbase accounts to Fidelity is straightforward. Select “Add Non-Fidelity Accounts” from the “All Accounts” dashboard. A pop-up enables users to choose between accounts to be added, with the Coinbase option featured. The user will then be taken to their Coinbase account where they can authorise access and complete the account linking process.
This partnership is a small example of how Fidelity has begun to embrace digital assets. Writing for The Street, Brian O’Connell and Ross Kenneth Urken noted that the company allows Bitcoin transactions in its corporate cafeteria, and Fidelity employees can donate in Bitcoin to the company’s Charitable Donor Advised Fund. The authors suggested that having a $6 trillion AUM investment company take interest in digital currencies adds a measure of validation for the assets, which are still in infancy.
“Bitcoin and other blockchain technologies are emerging from their infancy but mass adoption is still many years away,” says Fidelity Labs’ MD and SVP, Hadley Stern. At the same time, Stern warns against underestimating the attraction of digital assets and the underlying technology. “Just as many other technologies have done in the past, Bitcoin and blockchain will transform how we manage our finances.”
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