Wences Casares, who sold his Lemon digital wallet platform to LifeLock for $43 million late last year, has gotten $20 million in funding for a new bitcoin wallet and vault startup called Xapo.
The Series A is being led by Benchmark, with Fortress Investment Group and Ribbit Capital also participating in funding the Palo Alto, Calif., company.
“Over the past several years, Bitcoin has taken people on a wild ride. It has grown from the realm of early adopters who took a leap of faith on digital currency to become part of daily conversation amongst retailers, regulators, and consumers, among others,” wrote Casares in a blog post. “As it evolved, we recognized two key themes people continually asked the Bitcoin industry to address: trust and accessibility.”
You can say Mt. Gox again!
Thus, in an important offering, Xapo’s cold-storage vault and wallet will be fully insured by Meridian Insurance, Casares said, comparing the integrated system to a “safe-deposit box at your bank.”
In an interview, Casares said he became riveted by the bitcoin concept as a currency platform, due to the many volatile financial fluctuations in his home country of Argentina, where he grew up on a sheep farm. Many times, he recalled, his family’s finances were devastated as the economy there rocketed from inflation to deflation to devaluation.
“Not everyone has the stability that is present in the U.S. to protect the labors of their work,” he said. “I believe that we can use tech via digital currency to make the world economy more stable.”
When Casares saw bitcoin for the first time, he said, “I went crazy, since so much in the currency space had been too incremental. I thought that this might be it.”
But, he acknowledged, the recent volatility around bitcoin was unnerving to many.
“We have to make it friendly and make it safer,” said Casares, who said he will continue to consult with LifeLock. “People need to be more confident in bitcoin as a platform for money.”
We’ll see if that happens, but the space has gotten a lot of venture love of late, with a range of Silicon Valley investors pouring old-time cash into the sector.
Said Benchmark’s Matt Cohler, who called the investment a “no-brainer”: “Wences is one of the great entrepreneurs, and he combines a personal passion for bitcoin with very deep experience and expertise in global financial technology.”