The future of Bitcoin lies with tech firms as API developer Gem gains $2 million seed funding


Interest among venture capital firms to invest in Bitcoin infrastructure in the United States continues as specialist Bitcoin API developer Gem completes a round of seed funding to the value of $2 million led by First Round Capital and Tekton Ventures.

The firm’s first major investment round was also supported by RRW Ventures, Mesa+, Amplify.LA, Idealab, Baroda Ventures, Crypto Currency Partners, QED associates, Bitcoin Shop Inc and angel investor James Joaquin, representing yet another relatively high value investment in Bitcoin technology after TradeBlock secured $2.8 million in venture capital led by Andressen Horowitz earlier this year for its provision of cryptocurrency data and research services.

In this particular case, Gem has stated that the money will help accelerate growth of its new API, which was announced at the beginning of September at TechCrunch Disrupt San Francisco, local to the Californian startup’s base. Interestingly, despite being a newly established firm which operates in newly established industry sector whose future is not yet certain despite the complete u-turn in trust by large bona fide firms, regulators and investors in America compared to last year’s swaging disdain and instability, the firm has attracted Ken Miller to join its operation as Chief Operating Officer. A remarkable step by Mr. Miller, who spent seven years at PayPal as Vice President of Risk Management, which could be regarded as an extremely secure position within a highly established company.

First Round Capital’s somewhat vocal opinion on Gem’s potential success was voiced by one of the firm’s partners, Howard Morgan, who stated that his firm can be satisfied that Gem is well placed to become a leader as Bitcoin disrupts the banking and payments industries.

“Gem’s approach to the bitcoin world, building a previously non-existent security platform for developers and others to integrate into any solution, was game-changing to us for the industry,” said Mr. Morgan in an interview with Coindesk.

RRE Ventures co-founder Jim Robinson is aligned with Mr. Morgan’s line of thinking, stating that Gem’s API as the sort of disruptive innovation that has been lacking in the payments industry for a long time. “This is a team with strong security chops building key bitcoin infrastructure,” he said.

Gem CEO Micah Winkelspecht explained that there is more to the deal than mere funding: “Each investor has contributed not just their capital and vast network access, but also deep strategic advice. With this funding, our team is well-positioned to continue building the world’s most highly scalable and security-focused API, and continue to add key talent to the team.”

Mr. Winkelspecht further enthused that there are currently over 16,500 Bitcoin apps in development on GitHub and the company’s goal is to help developers focus on their overall product rather than the underlying Bitcoin protocol, cryptography and security.

Mr. Winkelspecht said the company is excited to receive this early stage funding, as it will help the firm become the all-in-one platform for bitcoin app development. He added that Gem enjoys “tremendous backing” from bitcoin developers.

Mr. Miller is highly enthusiastic about the potential success of Gem’s technology, stating that “The potential for an all-in-one bitcoin development platform and the rise of new and exciting bitcoin apps opens the door to new, innovative ways of managing not only bitcoin funds securely, but eventually any digital asset, and that was a technical and financial services revolution I wanted to help drive.”

It is clear indeed that venture capital firms have concentrated on investing in the technology developers which are constantly bringing new innovations into the Bitcoin ecosystem, rather than other aspects. Mr. Miller considers that the entire future of Bitcoin is in the hands of developers. “Gem’s platform will allow them to drive mainstream user adoption of Bitcoin with the next generation of great apps, using a highly secure solution from us that requires literally less than 10 lines of code. It’s going to change the game.”

The company does not have this sector to itself, even at this early stage, so fast is the onset of development within cryptocurrency this year. There are now three companies which provide an API for Bitcoin, of which Gem is one. Chain is the longest established, and is extremely well funded, having garnered a total of $13.7 million since inception, from a series of seasoned investors of which one is Barry Silbert, who is also among the investors which led the funding of TradeBlock.

In Gem’s case, it has to do battle with a similar start up, which was launched just last week under the designation CEX.io, which provides free API technology which has the brand name PlugChain. This technology is currently in beta guise, with its current version having been developed very quickly, and brought to fruition within a few weeks.

 

*Picture: Gem CEO Micah Winkelspecht addressed delegates at this year’s TechCrunch Disrupt conference in San Francisco, California.

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The future of Bitcoin lies with tech firms as API developer Gem gains $2 million seed funding

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