Bitcoin startup Blockchain takes US$40m in new funding

[LONDON] Blockchain, the Luxembourg-based bitcoin currency service provider, has raised US$40 million of fresh funding, led by Lakestar, representing one of the largest investment rounds in the financial technology sector since Britain's vote to leave the European Union.

New investors in the company, which provides technology such as virtual bitcoin wallets and analytical tools for the digital currency's underlying system, including Google's GV, as well as new financing from existing investors including Lightspeed Venture Partners and Sir Richard Branson.

"The pace of innovation in the digital currency space is unmatched," said Tom Hulme, a partner at GV. "We were impressed by Blockchain's consistent market traction and dedication to building secure financial products for an increasing number of users."

Bitcoin, and the blockchain system that powers it, is one of several virtual currencies and the value of one bitcoin skyrocketed more than 300 per cent in the last year. A competing currency, Ether, based on the ethereum blockchain, reached a record US$402 earlier this month.

Blockchain Chief Executive Officer and co-Founder Peter Smith said his company's new funding was raised before bitcoin and ether's recent run up. "We did it a few months ago," he told Caroline Hyde in an interview on Bloomberg Television Thursday.

While it has been accepted for legitimate transactions by companies such as Microsoft Corp, Expedia Inc and social media platform Reddit, it is also a favourite tool for criminals seeking ways of anonymously sending and receiving money, such as during the May WannaCry ransomware attack that affected countless businesses and hospitals worldwide.

In a press release, Blockchain said its new investment will support a wider global expansion and related localisation efforts, as well as further research and development for its product.

"The 14 trillion dollar financial services industry hasn't meaningfully changed in over a century," said Mr Smith in the release. "Blockchain is on a mission to create a financial system that is faster, more inclusive, and radically different than the status quo." Blockchain had previously raised US$30.5 million in 2014.

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