Wanxiang Fenbushi Capital participated in Circle's $60 million financing to expand into the global payment market

Wanxiang Fenbushi Capital participated in Circle's $60 million financing to expand into the global payment market

Rage Review : On June 23, 2016, Circle announced that it had just completed a total of $60 million in Series D financing, led by IDG Capital, with participation from Baidu, CICC, Everbright Holdings, Wanxiang and CreditEase. In addition, there were two individual investors, namely, Glenn Huggins, co-founder of Penghu Capital and legendary private equity investor, and Samuel Palmisano, former chairman and CEO of IBM. Distributed Capital, a subsidiary of Wanxiang, participated in Circle China's investment in Chinese projects and will actively participate in the implementation of Circle China's business in China.

Author: Amber Dingding

On June 23, 2016, Circle announced that it had just completed a total of $60 million in Series D financing, led by IDG Capital, with participation from Baidu, CICC, Everbright Holdings, Wanxiang and CreditEase, as well as two individual investors, namely, Glenn Huggins, co-founder of Penghu Capital and legendary private equity investor, and Samuel Palmisano, former chairman and CEO of IBM. Fenbushi Capital, a subsidiary of Wanxiang, participated in Circle China's investment in Chinese projects and will actively participate in the implementation of Circle China's business in China.

As an innovation in underlying technology, the impact that blockchain will bring to the world in the future will be no less than the emergence of the Internet. This change will definitely start from the development of the most basic technology and eventually slowly penetrate into the application level of finance and various industries. Any technological innovation requires time to ferment and improve.


Various capitals have invested in blockchain investment

IDG Capital founding partner Xiong Xiaoge also attaches great importance to the development prospects of blockchain. "IDG is very optimistic about Circle's blockchain and social payment vision. Just like the success of Alipay and WeChat Pay in China, we have full confidence in the Circle team." In addition, Distributed Capital, co-founded by Wanxiang Holdings Vice Chairman Dr. Xiao Feng, BitSares co-founder and one of the founders of the Bitcoin Foundation China Chapter Mr. Shen Bo, and Ethereum founder Vitalik Buterin, also participated in Circle's investment.

Distributed Capital was established in November 2015. It has invested in 20 projects around the world in 8 months, covering a wide range of industries and application areas. The main areas involved include: cross-border payment and remittance, smart securities, transaction clearing and settlement, luxury goods traceability, supply chain, data recording and management, and enterprise comprehensive solution providers.

Cross-border payment and remittance as payment methods in the sub-sectors cannot be ignored. For example, the current mainstream traditional cross-border remittance method - telegraphic transfer, its remittance cycle is generally as long as 3 to 5 working days, in addition to the intermediary bank will charge a certain fee. In order to solve the two major pain points of cross-border payment, high fees and long transfer cycles, cross-border remittances based on blockchain or distributed network technology can enable users to complete cross-border transfers at a lower cost and faster speed under a decentralized mechanism, which breeds a huge market space and is therefore valued by investment institutions.


"Exploratory" blockchain cross-border payment receives another round of D financing

Led by IDG, Wanxiang's Distributed Capital also participated in the investment in Circle China, a blockchain cross-border payment company in China, and will actively participate in the implementation of Circle China's business in China. What is the charm of Circle that is favored by Distributed Capital?

Circle is a payment platform founded in 2013 that develops tools for consumers to use Bitcoin, allowing consumers and merchants to quickly transfer payments and buy and sell Bitcoin. It is also the first company to obtain the first digital currency license BitLicense issued by the New York State regulator and the electronic currency license issued by the UK Financial Conduct Authority. With these licenses, Circle users will be able to easily use blockchain technology to make domestic or cross-border payments between US dollars and British pounds. More and more consumers and companies are becoming interested in Bitcoin because they can make online payments at a lower cost, with greater security and privacy than existing electronic payment methods. A major attraction for merchants is that they can avoid paying commissions and there is no risk of fraud and chargebacks associated with credit cards. A secure platform has been developed for consumers to protect consumer privacy. For merchants and charitable organizations, they will provide tools and services to allow them to accept digital currency payments without transaction fees.

Blockchain technology can be used to upgrade cross-border business, create new cross-border payment methods, and promote the development of cross-border business. The current traditional cross-border payment methods have long settlement time, high handling fees, and sometimes cross-border payment frauds may occur, bringing cross-border capital risks.

These are also the factors that attract venture capital institutions to continue to increase their investment. So far, it has received lead investment from Goldman Sachs and IDG Capital, and continued investment from Breyer Capital, General Catalyst Partners and Accel Partners, with a total investment of 76 million yuan so far. And it has timely expanded new business, that is, using the ultra-low interest transactions of the Bitcoin blockchain to provide instant and free fund transfers around the world. Circle is currently expanding its cross-border remittance business in the United States, Europe and other countries in the world. In addition to providing legal currency reserves and payments in addition to the existing Bitcoin-based business. The Circle wallet will have basically the same functions as other digital wallets, except that it also accepts Bitcoin, and users can trade in their favorite currency.

Circle Funding Timeline (2013-2016)


Circle China to expand into China

It is reported that Circle's CEO Jeremy Allaire may be invited to attend the Shanghai Blockchain International Week event to be held in Shanghai in September. He will interact with blockchain "enthusiasts" from China and share the latest information about blockchain.

The booming development of mobile payment and social payment in China has greatly inspired Circle. Although Alipay and WeChat Pay have already occupied most of the market in China and have achieved huge success, the examples show that innovation and development in the payment field have great growth potential.

Today, Circle has established a subsidiary, Circle China, to bring Circle's global services to Chinese consumers. Since China's Internet finance regulatory environment is different from that of Europe and the United States, it will initially focus on cross-border payments for Chinese consumers, and use blockchain technology to provide consumers with person-to-person payments between China and the United States and Europe, as well as cross-border payments between China and other developing countries. In addition to cross-border remittances, it will also provide another payment option besides credit card payments in the global e-commerce field.

Since China's Internet finance regulatory environment is different from that in other countries, many multinational Internet companies are currently unable to provide their own services in China. In addition, the payment field is a relatively sensitive financial industry segment in China. Circle's road in China is destined to be bumpy.


Cross-border payments open up a new way of point-to-point payment

Cross-border remittances through distributed network technology can enable users to complete cross-border transfers at a lower cost and faster speed under a decentralized mechanism, so there is a huge market space. "Blockchain" is a string of data blocks generated by cryptographic methods. Each data block contains information about all network transactions in the past ten minutes, which is used to verify the validity of its information (anti-counterfeiting) and generate the next block. "Blockchain" payment and transfer technology has the advantages of decentralization, convenience, high security, fast accounting speed, low cost, and mutual monitoring and verification.

Since blockchain technology creates a point-to-point payment method, eliminating the intermediary links of third-party financial institutions, it can not only make payments around the clock, instantly arrive, easily withdraw cash, and have no hidden costs, but also help reduce cross-border e-commerce funding risks and meet the convenience of cross-border e-commerce payment and clearing services. In the future, blockchain cross-border payment transfers will become an important international payment method, which has largely solved the drawbacks of existing traditional cross-border payments and greatly improved the efficiency between users. The iteration of the underlying technology is likely to be a protracted battle, but we have prepared enough ammunition and are ready to support blockchain innovation and eventually move towards commercial use.

At present, the development and application of blockchain technology are mainly in the 1.0 and 2.0 exploration stages. At the same time, major financial institutions around the world are investing heavily in blockchain technology research and blockchain projects, including Nasdaq, Goldman Sachs, Citibank, JPMorgan Chase, UBS, State Street, Santander, Barclays, etc.

Distributed Capital's investment in Circle China, an industry leader, is undoubtedly an important layout in the field of cross-border payment and transfer. The approval of the regulatory authorities in the United States and the United Kingdom is a recognition to a large extent. It is a major innovation in reshaping payment and an innovation of traditional cross-border payment and transfer.


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