Korean startup Coinplug has closed an investment round paid partly in bitcoin.
Coinplug raised $400,000 from Cupertino-based fund SilverBlue, with half the amount raised in bitcoin and the rest in fiat currency. The startup plans to launch a digital currency exchange, wallet and merchant platform in Korea in mid-December.
“It’s SilverBlue’s first investment,” said SilverBlue managing director Richard Yun. “In Korea, people take to new technologies really quickly, so I think [bitcoin usage] is going to boom in Korea, like China.”
According to Yun, who has a board seat at Coinplug and will serve as interim finance director, the investment will be used to develop a trading and merchant platform on the web and across multiple mobile operating systems.
Coinplug is expected to launch on 17th December and has 15 engineers on its team, which is spread across Korea and Silicon Valley. Yun claims Coinplug will provide “financial institution-level security” to its users.
Korea is a relatively undeveloped bitcoin market so, if it makes its launch date, Coinplug will be the country’s first end-to-end platform, similar to Coinbase, providing everything from an exchange to wallet and merchant services. According to Yun, interest in bitcoin in Korea is growing, but pent-up demand isn’t easily satisfied by existing international exchanges like Coinbase. The legal status of bitcoin exchanges in Korea is ambiguous at the moment. He added:
“Bitcoin is prime news in Korea now, but we need to educate people about it. They really want to buy.”
Coinplug won’t be the first Korean bitcoin exchange. A fixed-price exchange has been operating since 2012 by a company called Bitcoin Korea and another exchange called Korbit was launched this year. Yun is confident that Coinplug will beat the incumbents.
“People can compare [our competitors’] size to our size when we launch. We have good technologists and we have the funds,” he said.
CoinPlug and Silverblue’s founders have a long history. Coinplug’s founder and CEO is Ryan JoonSun Uhr, who founded mobile location-based services firm Celizion in Korea in 2002. He was also chief technology officer at Exio Communications, a San Jose wireless technology firm that was acquired by Cisco Systems for $165m, according to Yun, in 2000. Exio’s founder, Ki Hyun Joo, is SilverBlue’s chief executive. Both men, and Yun, worked at Cisco Systems for several years.
Asian bitcoin exchanges have been in the news recently. The BTC China exchange, for example, became the world’s largest exchange by trading volume last month, surpassing Japan’s Mt. Gox. The Chinese exchange also raised $5m in funding this month. GoCoin, a payment processor headquartered in Singapore, also announced a seed round of $550,000 this month. Owen Van Natta, a former Facebook chief operating officer, was a noted participant in the round.
Investors are rushing to fund bitcoin exchanges. Venture firms pumped an unprecedented $9m in funding into Boston-based Circle at the end of last month. The investors included Jim Breyer, Accel Partners and General Catalyst Partners. Circle’s founder is Jeremy Allaire, who previously helped create the web development language ColdFusion.
Other exchanges that have raised significant sums include Coinbase, with $6.88m to date and BitPay, which has raised $2.51m.
Featured image: Marc_Smith / Flickr