US Bitcoin company Circle receives $60 million investment from Chinese investors

[Caixin.com] (Reporter Liu Ran) American Internet finance company Circle announced today (June 22) that it has received a US$60 million Series D investment from a Chinese consortium, led by IDG, with Breyer Capital, General Catalyst Partners, Baidu, CICC ALPHA, Everbright Investment Management Company, Wanxiang and CreditEase also participating in the investment. In addition, there are two individual investors, Sam Palmisano, former chairman and CEO of IBM, and Glenn Hutchins, co-founder of SilverLake Capital.

At the same time, Circle established Circle China, which was established with millions of dollars of seed investment provided by investors in this round. It promotes the development of social payment systems based on blockchain technology in China and hopes to connect consumers using US dollars, pounds, euros and RMB. It is an independent Chinese company.

Circle was co-founded by Jeremy Allaire and Sean Neville in Boston, USA in 2013. Its first app was launched at the end of 2014 and has now attracted millions of users in 150 countries.

In October 2013, Circle announced a Series A investment of US$9 million from investors including Breyer Capital, Accel Partners and General Catalyst Partners.

In March 2014, Circle announced a Series B investment of US$17 million. Investors included Breyer Capital, Accel Partners, General Catalyst Partners and Oak Investment Partners.

In April 2015, Circle announced a Series C investment of US$50 million, mainly from Goldman Sachs and IDG Capital.

Circle application prospects

IDG founding partner Shong Xiaoge said in an exclusive interview with Caixin reporters that Breyer Capital has been a long-term partner of IDG Capital for the past decade, and its founder Jim Breyer had previously successfully invested in Facebook. Breyer is IDG's investment partner in the United States, and this is Breyer's second investment in Circle CEO Jeremy Allaire's startup project. His previous startup was a video website Brightcove, which was later listed on NASDAQ. "Jim himself is not a technical person, but because he had invested in Jeremy before, he took a fancy to Circle and introduced it to me. We also thought it was very good, so we invested in the C round, and Goldman Sachs also invested with us." Shong Xiaoge said that in the D round, "we invested a lot of money."

Blockchain is a public ledger platform that records and verifies all Bitcoin transactions. The use of blockchain technology means that currency exchange no longer needs to go through the traditional bank settlement system, making it a fast and cheap way to transfer money across borders.

Circle aims to use Bitcoin as a backend network, allowing users to control their funds in the form of currencies of various countries, so as to avoid possible losses caused by Bitcoin price fluctuations. When users want to transfer funds, they can also buy short-term Bitcoin to transfer funds (US dollars, British pounds, euros) to related bank accounts.

In 2015, Circle obtained a Bitcoin operating license (Bitlicense) from the New York State Department of Financial Services, and subsequently opened a USD and GBP exchange service in the United States. In April this year, Circle obtained the EEA E-Money Issuer license (EEA E-Money Issuer), an electronic payment license, issued by the UK Financial Conduct Authority. As a result, Circle reached a cooperation with Barclays Bank in the UK, and users can exchange Bitcoin for GBP after binding a debit card on the Circle app. Circle said that it will soon open the euro exchange function to Spain.

Xiong Xiaoge is very optimistic about Circle's blockchain and social payment vision. Referring to China's Alipay and WeChat Pay, he said that he has full confidence in the Circle team and believes that they can create global products that are used by hundreds of millions of people every day.

Xiong Xiaoge introduced that Circle has been communicating and sharing information with Chinese regulators, banks and other institutions. Domestic research on related aspects has been very in-depth, but China is not willing to do it easily now, fearing that it will cause a huge impact on the existing banking and financial system. However, if banks do not strengthen their research and participation in blockchain technology, they will definitely face a huge impact from Internet finance.

IDG Investment Philosophy

Xiong Xiaoge is very optimistic about the Internet finance sector and believes that there is a greater possibility of companies surpassing BAT in the Internet finance sector. However, the Internet finance that will become big in the future is not the 2C business, but the 2B business. For example, banks and other institutions themselves need technological upgrades. When investing in Internet finance, IDG pays more attention to technology rather than the company's ability to acquire asset scale.

Xiong Xiaoge said that IDG attaches great importance to TMT investment. In addition to continuing to focus on 2C (individual end users), it has also invested in many B2B services, such as Zhaogang.com. In addition, it attaches great importance to medical equipment, alternative energy, consumption upgrades, entertainment, sports and tourism. In terms of artificial intelligence, IDG has also invested in Ecovacs cleaning robots.

Xiong Xiaoge believes that there are two best times to invest: one is before the bubble comes, but this requires vision; the other is when the bubble bursts and the market is heading for a recession, when others may not dare to invest, but that is the best time to invest. "So I always say that the winter of the market is the spring of our investment." When the market is cold, it is the best time to invest because prices are more reasonable and investors are calmer.

There is more money in the market now, and IDG will also encounter competition for projects. "IDG has 10% with 10 million, and someone will immediately offer you 20 million. The competition starts just like that. All the research we did for half a day is in vain. I often laugh at the saying: a random punch can kill a master."

Xiong Xiaoge believes that there are only two ways for the master to avoid being beaten to death: first, do not fight with random punches and do not participate in the scramble for projects. Second, you have to study hard and practice hard. The master also has to learn some new tricks before he can do well. You must pay attention to research. There are both cold and hot markets.

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