Bitcoin-focused security-as-a-service provider BitGo has secured $12m in new funding courtesy of several venture capitalists, seasoned bitcoin investors and a famed Hollywood A-lister.
The funding round was led by VC firm Redpoint Ventures and it attracted Barry Silbert’s Bitcoin Opportunity Corporation, Radar Partners, Liberty City Ventures, Crypto Currency Partners and Ashton Kutcher’s A-Grade Investments.
Speaking to CoinDesk, BitGo CEO Will O’Brien framed the successful funding round as being about “more than capital”, telling CoinDesk:
“The folks that we’ve brought on [are] people like Stratton Sclavos, former CEO of VeriSign, and industry influencers like Barry Silbert. […] We’re putting together a company that Fortune 500 [firms] and the largest hedge funds can trust as their bitcoin security platform.”
O’Brien added: “This capital is about team, building a trusted brand and scaling globally”.
The news follows BitGo’s recent addition of former Facebook employee Ben Davenport, who joined the company as head of product and co-founder in May.
Fortune 500 quality
O’Brien told CoinDesk that the funding would help improve BitGo’s position and bring enterprise bitcoin security to a whole new level, saying:
“Bitcoin is obviously still in its early innings, and we feel fundamentally that security is a threat to bitcoin adoption, and as an industry we need to solve this problem.”
O’Brien added that the company has been focused on security “from day one”, when his team came to market with the first multi-sig wallet in August 2013. The company has since focused efforts around building a robust platform that can enable businesses and financial institutions to securely store and transact in bitcoin.
The CEO likened the progress of his business to early Internet trailblazers who helped pave the way for e-commerce, stating:
“If you go back to the early days of the internet, it wasn’t safe for you to put your credit card on a website, and companies like VeriSign came to market and enabled the growth of the Internet today. There’s a lot of DIY and experimentation and we need to quickly move toward standards and robust security platforms.”
Security and celebrity talent
BitGo used the opportunity to announce that it has new board members, including former VeriSign CEO Stratton Sclavos and Jeff Brody of Redpoint Ventures.
VeriSign is a hugely successful e-commerce platform that has become a de-facto Internet standard. Further, Brody was one of Redpoint’s founding members and he was ranked 19th on the Forbes Midas List of tech’s top investors.
As for Hollywood talent, Ashton Kutcher is also on board.
Kutcher is no stranger to the world of bitcoin, as he was also an early investor in bitcoin merchant payments processor BitPay.
Banking on multi-sig security
BitGo describes itself as a leading bitcoin security platform that offers multi-sig security-as-a-service, and claims to provide the industry’s most secure online bitcoin wallet and enterprise solutions for corporate users.
The company says its investors include elite Silicon Valley angels and venture capitalists who have backed successful companies in the past, such as PayPal, Tesla, Twitter and Yammer.
Emphasizing enterprise-grade security, BitGo aims to offer institutional investors the opportunity to store bitcoin in online wallets and access their holdings on short notice.
Image via ForbesAs the above diagram shows, the BitGo platform uses three keys to bolster security. One is held by the user, encrypted in their browser. The second is generated by BitGo and stored on its servers. Finally, the third key (or the cold key) is generated offline, and it is only used for disaster recovery in case one of the other two keys is lost or compromised.
In a transaction, BitGo acts as a co-signer. The user can also set up additional layers of security, such as spending limits and corporate treasury policies.
Image via BitGo