An Israeli bitcoin startup focused on enabling bitcoin purchases with credit cards has closed a $7m Series A funding round.
Backing Simplex are bitcoin mining firms Bitmain and Cumberland Mining, and FundersClub, a crowdfunding platform that previously invested in Coinbase. A group of angel investors, which Simplex declined to name, also contributed to the funding.
The amount adds to a previously raised $1.4m, bringing the firm’s total fundraising to $8.4m.
Simplex CEO Nimrod Lehavi said that the company acts as a payment processing layer for bitcoin purchases via credit card, with a focus on fraud reduction that reducing the consequences of chargebacks for businesses, such as exchanges or brokerages, that offer the service.
Lehavi told CoinDesk:
“We launched the beta product about a year ago. We kept it kind of low key up until we were able to offer the service better. We came to the world to solve a very big and annoying problem: It’s such a drag to buy bitcoin.”
In interview, Lehavi repeatedly invoked the firm’s commitment to fraud mitigation, pointing to the experience of CTO Erez Shapira and CRO Netanel Kabala, both of whom previously worked for PayPal in similar capacities.
Lehavi said that Simplex’s customers benefit from offering a way to sell bitcoin more quickly than with wire transfer, and in the event of fraud or a chargeback, Simplex absorbs the cost.
“Even if there’s a chargeback, we’re still paying them the money,” he said.
According to Lehavi, the firm began beta testing its service about a year ago, and its website cites customers including cloud mining provider Genesis Mining and bitcoin exchanges Spectrocoin and Bits of Gold.
Lehavi says that since then, the service has processed more than $3m in bitcoin purchases via credit card, concluding:
“We went live about a year ago with a few selected design partners, and we’ve managed to process, so far, about $4m in purchases and [be] able to fight fraud and fight it pretty well.”
Image via Simplex