Visa-linked Bitnet Raises $14.5M to Bring Bitcoin Payment to Mainstream Large Retailers
Bitcoin service provider Bitnet Technologies has closed a $14.5 million Series A funding round led by Highland Capital Partners to bring bitcoin payment to large enterprise retailers.
The major story of Bitnet is in the pedigree of its founders and backers. The company was founded in January 2014 by Visa and CyberSource veterans John McDonnell and Stephen McNamara, who are respectively CEO and CTO of the company. CyberSource is considered the world’s largest payment gateway, and in 2010 was sold to Visa for $2 billion.
The Bitnet founders hired dozens of other veterans of CyberSource and Visa to fill out theirs engineering, product, and business development teams.
This connection to CyberSource in turn was obviously a powerful factor in Bitnet’s attraction of investors. In addition to Highland, the other investors in the round include Japanese ecommerce giant Rakuten; Webb Investment Network, founded by Yahoo and Visa board member Maynard Webb; Bitcoin Opportunity Corp, founded by Barry Silbert; Stephens Investment Management, founded by Bart and Brad Stephens; Commerce Ventures, founded by Dan Rosen; Buchanan Capital Management, founded by Tad Buchanan; venture capitalist Stuart Peterson; Bill McKiernan, Bitnet chairman and founder of CyberSource; Carl Pascarella, former Visa CEO; and Jack McDonnell, founder of TNS.
Bitnet has said the funding will be used to continue developing its platform and building sales, marketing and customer service teams. The company, which currently has offices in San Francisco, California and Belfast, Northern Ireland, also plans to expand its physical presence into continental Europe and Asia. Peter Bell, Partner at Highland, will join Bitnet’s board of directors.
“John, Stephen, and the team they have assembled are the epitome of what we mean when we talk about partnering with innovative entrepreneurs who have the ambition to build disruptive, market-leading companies,” said Peter Bell of Highland Capital Partners. “Bitnet is breaking down the barriers of digital currency transactions and has the potential to transform the way we exchange goods and services around the world.”
The mission of Bitnet is to provide a bitcoin payment platform that is secure and reliable enough to attract large amounts of enterprise-scale merchants. In order to be converted to bitcoin payment option, large retailers need a platform that is highly secure, can handle a high volume of payment transactions as well as complex back-end financial applications, and can interface with retailers existing systems.
“We are listening to the world’s largest merchants,” said McDonnell. “Many of these bigger companies have looked at existing solutions and have remained on the sidelines — until now. With Bitnet, we’re building the integrations, systems and technologies that multi-national retailers and travel companies need in order to accept bitcoin. Being scalable and integrating with existing payment systems and commerce platforms are what’s important to them. Uptime is critical, as are integrated reporting and reconciliation capabilities. Bitnet removes the risk of accepting bitcoin, allowing merchants to take payments with zero liability — no fraud, no chargebacks, and no false declines.”