Bitcoin firm raises funding from Bain, New York Life, MasterCard

By Gertrude Chavez-Dreyfuss
NEW YORK, Oct 27 (Reuters) - Digital Currency Group, a
holding firm focused on investing and developing businesses that
deal in bitcoin and other cryptocurrencies, has raised funding
from some of the biggest U.S. financial names, founder and
chief executive officer Barry Silbert said on Tuesday.
Bain Capital Ventures, the Boston-based venture capital unit
of private equity firm Bain Capital, credit card company
MasterCard, insurance giant New York Life Insurance Company, and
Canadian bank CIBC were four of the company's new investors.
The holding company (DCG) is currently building and
supporting the largest early-stage investment portfolio in
digital currencies and the blockchain, the underlying technology
behind bitcoin.
Silbert, a prominent bitcoin advocate and investor, declined
to disclose the amount of funding raised from the new investors.
The other investors in DCG include a range of venture
capital firms and family offices such as FirstMark Capital,
Novel TMT, Oak HC/FT, RRE Ventures, Solon Mack Capital, and
Transamerica Ventures.
Bain, CIBC, New York Life, Mastercard, FirstMark, Novel,
Oak, and Transamerica are investing in bitcoin for the first
time, Silbert said.
Structuring DCG as a company and not a fund is a strategic
business decisions, Silbert said, and the business model is
similar to that of Berkshire Hathaway (N:BRKa), founded by billionaire
investor Warren Buffett.
"Setting it up this way gives us flexibility," said Silbert,
in an email to Reuters. "We can start companies, invest in
companies, buy companies, etc and it gives us patient, permanent
capital."
There is therefore no need to raise a bunch of different
funds with different investors, he said, adding that this gives
the company the opportunity to go public down the road.
DCG was formed this year with the merger of two
SecondMarket Solutions companies: Genesis Global Trading, a
bitcoin over-the-counter trading firm, and Grayscale
Investments, a digital currency asset management firm that
manages the publicly-traded Bitcoin Investment Trust.
SecondMarket, an entity that has helped private companies
facilitate trading in their shares, was founded by Silbert. It
was acquired last week by Nasdaq Private Market. Financial terms
were not provided.
Silbert has invested in some of the biggest bitcoin
companies: Coinbase, BitPay, Circle, itBit, Ripple, Xapo, and
Coinsetter.
Bitcoin is a virtual currency bought and sold on a
peer-to-peer network independent of central control. The digital
currency is used for retail purchases and investments. Other
virtual currencies include litecoin and dogecoin.
One bitcoin is currently worth around $296.01 on
the BitStamp platform.