AlphaPoint has raised $1.35m in new funding to expand its line of digital currency exchange solutions while bringing its products to new international markets.
The funding round included VC firms Ben Franklin Technology Partners and Robin Hood Ventures, as well as notable angel investors such as Invite Media co-founder Scott Becker and DuckDuckGo CEO Gabriel Weinberg.
Speaking to CoinDesk, AlphaPoint CEO Vadim Telyatnikov framed the funding round as one that will empower his company to help major digital currency exchanges better meet the increasing demands of their large-scale operations, while new entrepreneurs, in turn, will be able to leverage the technology to launch marketplaces in new jurisdictions.
Telyatnikov explained his company’s big-picture vision, adding:
“We see ourselves as the Intel Inside, with our clients marking themselves as their own brands and we’re the technology on the back end.”
Becker told CoinDesk that he believes more exchanges will want to outsource the difficult technical components of building and scaling a complex infrastructure, and that this is where AlphaPoint can gain traction in the market.
“Customers must put a lot of trust in their technical partner – if the technology can’t keep up with volume or feature needs, their business can’t operate or stay competitive,” Becker said. “I would put my trust in AlphaPoint. The AlphaPoint team has already built successful exchange and trading systems in both the finance and online advertising spaces.”
Telyatnikov estimates that AlphaPoint now has roughly a dozen clients all over the world, including major regional bitcoin exchanges such as Canada’s Cointrader and Mexico’s meXBT.
Building better bitcoin exchanges
AlphaPoint currently offers two products, the AlphaPoint Exchange Platform, which advertises that it can process 1 million digital currency transactions per second; and the AlphaPoint Exchange Remarketer, which connects exchanges for liquidity.
“If an exchange starts up in Mexico, the buyer can easily pull liquidity from another exchange on the platform or the external exchange that doesn’t use our platform,” Telyatnikov said.
AlphaPoint believes its solutions will appeal to both new and established companies, as entrepreneurs sometimes lack the technical ability to launch sophisticated trading systems. Likewise, it argues that established exchanges may need solutions that allow them to focus on the tasks that come with running a consumer-facing platform.
Telyatnikov believes AlphaPoint is in a unique position to meet the needs of this market given the experience of its team. Founder Joe Ventura, for example, has developed high-speed software systems for financial institutions, including Deutsche Bank, Merrill Lynch and UBS.
Similarly, co-founder and VP of development Jack Sallen brings 15 years of experience in financial services, first working in automated electronic arbitrage on leading derivatives marketplace Chicago Mercantile Exchange.
Falling in love with bitcoin
Telyatnikov boasts a similar depth of experience as the company’s founders. Before joining AlphaPoint as its CEO this summer, Telyatnikov founded LiftDNA, a supply side platform focused on ad sales that was later purchased by OpenX. After spending one year with OpenX, however, Telyatnikov left the company for a more entrepreneurial path.
Telyatnikov told CoinDesk that AlphaPoint is not his first bitcoin project, though others never made it passed the planning stages.
“I left to start a hedge fund,” Telyatnikov said. “In August of last year, we started taking a deep look at bitcoin and actually started trading bitcoin, and started to develop a strategy. It worked really well, we were very close to launching our own fund that focused on bitcoin and digital currency, but we decided not to do it and focus on our core strategy.”
Still, Telyatnikov said that in the process he “fell in love” with bitcoin and its underlying technology. This passion led him to Inside Bitcoins New York this April, a conference he attended while working on a bitcoin startup with his brother. There, he met Ventura, and afterwards the two forged a new partnership.
Telyatnikov is now confident AlphaPoint is the right platform that can help expand bitcoin use globally, while capitalizing on trends in the market.
“I think we’ll see more and more exchanges, right now depending on what country you’re in it’s still really hard to get access to bitcoin,” Telyatnikov said, adding:
“Through next year and beyond we see more exchanges focused on local countries and our end vision is that anybody no matter where they are in the world, they’ll have access to buy digital currency.”
Images via AlphaPoint; Shutterstock