Bitcoin start-up Spondoolies secures $1.5m in funding from BTCS

Bitcoin start-ups seem to be enjoying an incessant growth of interest from investors lately, with the latest piece of evidence in this respect provided today from Israeli company Spondoolies-Tech.

According to a report by online journal Globes, Spondoolies has managed to attract investment worth $1.5 million from Bitcoin Shop Inc (OTCMKTS:BTCS), blockchain technology company providing transaction verification services. Spondoolies-Tech, based in Kiryat Gat, is engaged mainly in transaction verification server manufacturing.

Today’s announcement comes on the heels of a bit of news from the end of April, when BTCS and Spondoolies said they signed a Letter of Intent to merge. The $1.5 million investment marks the first step of the planned merger.

Back in April, the companies said they believed the combined business will turn into the world’s first publicly traded company to produce Bitcoin transaction verification equipment and deploy Bitcoin mining resources.

Let’s mention some of the details of the merger. Under the definitive investment agreements, BTCS acquired a 6.6% equity interest in Spondoolies, and received certain exclusivity rights and pricing for current and future Spondoolies’ products. The investment in Spondoolies was based on a pre-money valuation of approximately $21.2 million.

Once the merger is finalized, the companies will equally share the dilution resulting from BTCS’ April 22, 2015 $2.3m financing.

Charles Allen will assume the role of CEO and chairman of the merged business, whereas Guy Corem, Spondoolies CEO and cofounder, will act as a board member and executive officer. In addition, Yuval Rozen will become BTCS’ chief financial officer.

Allen said, “This is a powerful merger as the technologies of the two companies are clearly very complementary and stand to produce immense revenue growth while delivering value to customers, shareholders, and employees.”

Corem commented: “We are excited to begin our partnership with BTCS and appreciate their support during a transformative part of our company’s growth. We believe this new relationship will ensure our ability to continue development and production of innovative and high quality products, targeted mainly for internal use of the merged company but also to deliver the highest quality bitcoin mining equipment for our transaction verification services.”

As mentioned earlier, Bitcoin technology developers have been attracting investors’ attention (and money) lately. A recent example was provided by San Francisco-based 21 Inc. In March this year, the company secured itself a $116 million worth of venture capital funding from names like Andreessen Horowitz and RRE Ventures.

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