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American VCs exploring European crypto markets? Invest in crypto exchange-Coinhouse

 

american vc crypto

 

Headquartered in Paris, Coinhouse in a cryptocurrency exchange that lets users buy digital tokens using their credit, debit card or bank transfer. The company claims to be a no-brainer for newbies looking to dive into the crypto world because of its user-friendly features such as does all billing in Euros, instantly delivers crypto to its users and always sells at the current market price, while clearly mentioning the company’s commission on each transaction. Coinhouse stands out from the crowd for its reputation and compliance with regulations. To make purchases users must verify their ID and the exchange also complies with Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations. To sweeten the deal Coinhouse also has a physical location in France, dubbed La Maison du Bitcoin, where users can go personally to buy crypto. 

 

Coinhouse recently made headlines, when it raised $2.8 million in capital, as part of a series A funding round from a group of well-known venture capital firms such as Digital Currency Group and ConsenSys ventures among others, according to InWara’s private funding database.

 

The past few months have witnessed bearish market trends prevailing — also monikered as Crypto Winter. Private funding, so far in Q1 2019, in the Blockchain and crypto space fell by ~95%, compared to Q1 2018, indicating the market may still be recuperating after its dramatic downfall.

 

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 Quarter-wise Private funding data till Jan 2019

Source: InWara’s private funding database

 

Digital Currency Group 

 

Digital Currency Group is a venture capital company and is considered a first mover in the Blockchain venture capital space. The company aims to accelerate the development of a new financial ecosystem for the world, one that leverages Blockchain and crypto technology. The firm has previously invested in several high profile startups, influential in the crypto space, some of the marquee assets in DCG’s portfolio include-

 

Kraken 

 

Kraken is a San Francisco based Bitcoin exchange, that distinguishes itself allowing trade using various major fiat currencies like US dollars, British pounds, and Japanese yen among others. Kraken also claims to be the world’s largest Bitcoin exchange in Euro volume and liquidity. Kraken recently made headlines when it acquired UK based crypto exchange and indexing platform Crypto facilities for north of a $100 million. To understand how this acquisition plays out in Kraken’s favor check out InWara’s article. In retrospect, DCG took part in a ‘series A’ funding round for Kraken back in 2014, valued at $5 million, according to InWara’s private funding database. According to a recent report published by Fortune, Kraken is on the verge of raising $100 million in a series C funding round in which Digital Currency Group and Hummingbird Ventures are rumoured to part in.

 

Circle

 

Circle is an American internet finance company build on a Blockchain platform. The company has created a conducive platform for its users to quickly send and receive money without facing many difficulties. Circle manages to achieve this by partnering with Circle Pay and leveraging Blockchain technology. Circle also provides its users with an investment platform monikered Circle Invest, that enables its users to easily to buy and sell crypto assets. Unsurprisingly, Circle also has an OTC trading services product, dubbed Circle trade and is one of the largest global liquidity pools for digital assets trading and averages $2 billion in monthly volume. According to InWara’s private funding database, Digital Currency Group has participated in a Series E funding round for Circle, valued at $110 million.

 

Ledger

 

Ledger is a Blockchain and cryptocurrency security enterprise that was founded in 2014. The company claims to have sold millions of crypto hardware wallets across various countries. Ledger also has announced plans of providing financial institutions with a Ledger vault, that can safely and securely store their crypto assets. Ledger aims to create a conducive environment for massive adoption of new technologies, where there a lack of, due to security concerns. According to InWara’s private funding database, Digital Currency Group took part in a series B funding round for Ledger, valued at $75 million.

 

DCG has over years has been relatively consistent in backing Blockchain and crypto enterprises. According to InWara’s private funding database, in 2018 alone DCG has either led or participated in 23 funding rounds across the sector. Interestingly since 2014, DCG has been backing more or less the same number of Blockchain and crypto startups, with over 50% of these being Seed funding rounds. 

 

Private funding data by year of Digital Currency Group

Source: InWara’s private funding database

 

Digital Currency Group’s participation in $110 million series E funding round for Circle, was one of the noteworthy deals of 2018. In retrospect, DCG has participated twice in Circle’s funding rounds. The first in 2014, when Circle managed to raise $17 million as part of a series B funding round and the second in 2015 when Circle raised $50 million as part of a series C round. However, DCG was not the sole participant in these funding rounds and was also accompanied by other well-known VC firms such as Pantera, Blockchain capital and big banks such as Goldman-Sachs.

 

Digital Currency Group’s subsidiaries

 

Coindesk

 

Coindesk is one of the foremost media outlet companies in Blockchain and crypto space. Founded back in 2013, Coindesk quickly gained a reputation as a reliable source in the Blockchain and crypto space and was responsible for the creation of Bitcoin Price Index, which was widely sourced in well-known news outlets such as The Wall Street Journal, Forbes and Financial Times among many others. In 2016, according to InWara’s M&A database, Digital Currency Group acquired Coindesk for $0.5 million. 

 

Genesis

 

Genesis is a digital currency trading platform for high-net-worth individuals and institutions, aiming to invest in Blockchain and crypto space. The firm offers two-sided liquidity for buyers and sellers. Last year the company also started a lending business monikered Genesis Global capital, which will allow investors to borrow cryptocurrencies in parts worth $100K or more for fixed terms. Loans can be issued in Bitcoin, Ether, XRP among many other popular cryptocurrencies. Genesis trading is a subsidiary of Digital Currency Group, and the company believes institutional crypto lending service could increase the general liquidity in the marketplace. As a spokesperson to Genesis Capital was quoted saying “We believe now is a great time to offer an institutional-focused lending service because it will increase general liquidity in the marketplace, encourage new financial institutions to participate in a two-sided market and increase the working capital that companies use to scale their digital currency-centric businesses,”.

 

Grayscale

 

Grayscale, a subsidiary of Digital Currency Group, claims to be one of the foremost authority on digital asset management and investment. Last year the firm managed to raise a whopping $330 million mainly from institutional investors, according to a report by CNBC. The firm believes Bitcoin’s price drop is a great opportunity for investors to increase exposure to the cryptocurrency at a much more affordable entry point. 

 

ConsenSys Ventures

 

ConsesSys Ventures is a Blockchain venture production studio and a subsidiary of ConsenSys. ConsenSys is a global community of developers, businessmen and lawyers among other professionals, that aim to proliferate Blockchain infrastructure and P2P networks. ConsenSys is headquartered in New York and was founded in 2014 by Ethereum co-founder Josef Lubin. ConsesSys ventures led by its managing partner Kavita Gupta, made a $1 million investment in Coinhouse. The reason for investing in Coinhouse, according to Kavita was because of its distinguished leadership and team members. She was quoted saying “According to Coinhouse, the platform has over 150,000 user accounts. Plus, the startup’s CEO, Nicolas Louvet, was an early investor in the hardware wallet startup Ledger. Ledger CEO Éric Larchevêque was a reciprocal investor in Coinhouse and both men now sit on the boards of each other’s respective companies” she added, “A settlement custody solution [Ledger] working with the exchange [Coinhouse] … is very relevant to how at ConsenSys Ventures we think about investing,”.