***This story turned out to be false. BitAccess never closed the deal with Bridge, who spoke prematurely about his investment firm’s commitment to the company. BitAccess appears to have made out pretty well from the buzz though, having just graduated from the Y-Combinator accelerator in Silicon Valley. I’ve since met the team in person. They are impressive and doing well. Lesson learned (from my rookie days), but no harm done.***
BiT Capital, a Canadian Bitcoin investment firm, has committed up to $10 million in seed funding to BiT Access, an Ottawa-based Bitcoin ATM startup. Although the funds will be invested gradually over the next 1-2 years, the commitment itself represents the largest seed investment yet into a Bitcoin-related venture, eclipsing the $9 million seed round raised by Jeremy Allaire’s Circle Internet Financial in October. BiT Capital’s founder, John Bridge will join the BiT Access board of directors.
“BiT Capital is thrilled to partner with BiT Access,” said Bridge. “We believe Bitcoin ATM’s are a vital part of the infrastructure that will enable people to easily obtain Bitcoin. We are looking forward to working with BiT Access and becoming a dominant player in this segment of the Bitcoin economy.”
BiT Access recently installed its first machine in the Clocktower Brew Pub in Ottawa, and will deploy additional machines in Montreal, Calgary, Winnipeg and Vancouver in the coming weeks. The company also plans to install its first American BTM in two weeks, right next to the New York Stock Exchange. The seed investment will help BiT Access deploy nearly 500 of its “BTMs” worldwide in 2014, with the goal of installing 5,000 within three years. In fact, Bridge said that international expansion was imminent; BiT Access BTMs will land in the U.K. and Europe this spring.
The first-generation machines will allow individuals to deposit up to $3,000 at a time into their Bitcoin wallets. However, customers will only be able to withdraw cash upon the release of a second model (and software) early this spring. The BitAccess BTMs will also be the first to accept Litecoins, the leading alternative crypto-currency to Bitcoin.
Although BiT Access is a brand new market entrant, the investment will make the company a formidable competitor to other Bitcoin ATM ventures, Robocoin and Lamassu. The BiT Access BTMs may prove to be more compelling investments for partnering operators, and customers won’t need to worry that their machines will run low on bitcoins since BiT Capital has also become the company’s de facto bitcoin “bank.” (One of Bitcoin’s first true market-makers, BiT Capital has accumulated over $100 million worth of bitcoins to date.)
BiT Access does not plan to invest in money transmitter licenses in order to do business in the U.S. Instead, the company is partnering with operators that already have their own MTLs. As Bridge told me, “If you know anyone with a license for Massachusetts, we can get one in Boston in a matter of weeks.”
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About me and my pseudonym: I’m a non-hacker cofounder of two separate bitcoin ventures and more opinionated than my IQ warrants. I’m a also a former VC. I blog about the business side of Bitcoin, and I’m interested in projects that improve the health of the broader ecosystem.
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