virtual currency

Bitcoin startup Circle lands $17 million

March 26, 2014: 9:00 AM ET

The Bitcoin exchange business also launches its first consumer-focused product today.

"My perceptions is that 95% of the users are alpha-geek types who want to own a bitcoin and say they own a bitcoin. They think that hopefully it'll go up in value and so forth," says Circle CEO Jeremy Allaire. Photo: Circle.

FORTUNE -- Circle Internet Financial has just raised another $17 million, Fortune has learned.

The Bitcoin exchange startup, founded and run by serial entrepreneur Jeremy Allaire, closed its Series B financing round, bringing Circle's total funding to $26 million. Oak Investment Partners led the round, joining other new backers such as Pantera Capital and the Bitcoin Opportunity Fund of Barry Silbert, CEO of SecondMarket. Previous investors Breyer Capital, Accel and General Catalyst also participated in the round. According to Circle CEO Jeremy Allaire, the startup will use its new funding to grow from 20 employees to around 45 by the end of 2014, as well as invest in areas such as security and compliance.

"My perception is that 95% of Bitcoin users are alpha-geek types who want to own a bitcoin and say they own one," says Circle CEO and founder Jeremy Allaire. "We're trying to take a mid- to long-term view on what the opportunity is, which is to provide consumer financial services that are acceptable to a much more mainstream user base than where the market is today."

MORE: One more reason not to spend your bitcoin

To wit, Circle's first consumer-focused product also launches today: a feature that allows users to open a new, secure account, deposit traditional currency, and have that automatically converted into a digital equivalent. Allaire hopes this feature offers a simple user experience not unlike how Skype enables its members to easily conduct voice and video calls.

While it's still early days for cryptocurrencies, Ifty Ahmed, a partner with Oak Investment Partners, led Circle's latest round of funding because he sees huge market potential, which in turn, means huge potential for ventures like Circle. Says Ahmed: "Jeremy has been extremely proactive about compliance and policy, and that already makes Circle head and shoulders more competitive than others in the space."

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