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500 Startups Funds Five Bitcoin Startups With $100,000 Each

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Mountain View, CA-based accelerator 500 Startups has announced it is funding five bitcoin companies in its latest batch of startups with $100,000 each.The bitcoin companies are part of 500′s Batch 9 group, with 30 total companies going through four months at the accelerator to help them build a business idea.Sean Percival, who runs the incubator for this batch, says the funding will allow the bitcoin startups to really focus on product:“$100,000 for these companies is going to go a long way. For some of them it actually provides them a year of runway, so they don’t have to go raise money and they can really prove the product out.”Building bitcoin businessesIn addition to the $100,000 in funding, the bitcoin companies in the 500 Startups program will be receiving mentoring from experts within the industry.“I’m looking to bring in thought leaders in bitcoin that can help them, and to help them find the right investors”, said Percival, ”because there’s not many of them.”He believes that Silicon Valley only has a handful of investors interested in bitcoin because the total addressable market isn’t very large yet:“Consumer adoption is very low right now, and it’s not growing at the pace it probably needs to.”500 Startups is known for embracing marketing and distribution in order to build up its companies. Percival’s background is in marketing, so his experiences will translate into helping to get the word out about these businesses in order to grow mainstream awareness.TalentAnother reason why 500 Startups is so generous with its funding is because the accelerator understands the cost of hiring developer talent in Northern California.Percival says that most startups need to go out and find software development expertise to help build a company:“In most cases, they need to hire developers. And developers are costly. With that money, it’s not just one guy in a corner trying to make it work.”The Bitcoin Job Fair, being held next month at the Plug and Play Technology accelerator, is one source of that Percival sees as one avenue for finding talent in the area. “A few of them are going to attend that”, he said.Bitcoin acceleratorsThere are currently three other Silicon Valley accelerator programs that are incubating bitcoin companies in addition to 500 Startups.Boost VC has had the largest number of bitcoin-based startups go through its program and plans on funding 100 more in the next few years. Plug and Play Technology Center in Sunnyvale is also accepting bitcoin startups. And CrossCoin Ventures in downtown San Francisco is also looking to fill out its space with virtual currency companies. Source: State of Bitcoin 2014(Click to enlarge) Source: State of Bitcoin 2014Percival says that the incubator ecosystem that exists today is collegial in nature; the accelerators all understand that it takes a group of them in order to help build an industry around cryptocurrencies:“All the accelerators are sort of being very symbiotic. We’re all in this together right now, we have a lot of work to do,” Percival said.CompaniesThe five bitcoin companies in 500 Startups’ program include:GoGoCoin – sells bitcoin in gift card form to provide an easy way for users to obtain their first BTC;Bonifide.io – anonymous transaction ratings for people in order to build up a reputation score;Coinalytics – bringing real-time data to users in the form of information analytics and news aggregation;Neuroware – HTML5 wallet, private keys are stored in a user’s brain using distributed deterministic components; andMonetsu – focusing on merchant adoption and payment processing.Bitcoin is the core business for each of these companies. Altcoins aren’t at the stage that a startup should really be focusing a company on, according to Percival:“I’m mostly focused on bitcoin. I’m interested in some of the other things going on, the altcoins. But all of the companies are focused on bitcoin.”500 Startups image via betakit500 StartupsBitcoin Job FairBonifide.ioBoost VCCoinalyticsCrossCoin VenturesGogocoinMonetsuNeurowarePlug and Play Technology CenterSean Percival
Original author: Daniel Cawrey