This virtual currency thing just got another piece of validation: in the wake of Bitcoin’s spectacular rise, fall and wary stabilization, Google Ventures has decided to invest in OpenCoin, the company behind the Ripple distributed currency exchange.
(Quick note: We’ll be hosting some Bitcoin experts at the San Jose Tech Museum on Thursday, May 16, from 6-9pm, so be there if you’re into this stuff.)
Ripple, billed as “the world’s first open payment network”, may lack the rebel allure of Bitcoin itself, but its distributed model could patch one of Bitcoin’s chief weaknesses, namely its reliance on a few sometimes less-than-transparent exchanges. Of course, Ripple will be usable for the exchange of other currencies, too, and it arguably sits alongside other new financial technology startups such as Transferwise.
In April, OpenCoin received investments from Andreessen Horowitz, FF Angel IV, Lightspeed Venture Partners, Vast Ventures and Bitcoin Opportunity Fund. The new angel round, just one month later, comes courtesy of Google Ventures (who we hear put in less than $200,000) and IDG Capital Partners.
In a statement, IDG’s Feng Li said his firm was “excited about the prospect for a global payments system that powers instant, free and secure transactions in any currency.” OpenCoin CEO Chris Larsen, meanwhile, promised using Ripple would be “as easy as sending an email.”
Speaking of emails, OpenCoin recently sent some to those who had signed up to receive “ripples”, which will be a sort-of-currency in themselves but which will mainly be used as transaction tokens on the network, to try to stop attackers from flooding the network with tiny transactions. The company promised that those who signed up before May 9 would get given free ripples by the end of the month.
Other recent investments in this space include $5 million from Fred Wilson’s Union Square Ventures for Bitcoin transaction platform Coinbase, and a $6 million Peter Thiel-led round for Transferwise (which, it should be noted, is engaged in the global payment platform space but doesn’t deal in Bitcoin). And more money seems set to flow: also on Tuesday, New York’s Liberty City Ventures announced a $15 million fund specifically for Bitcoin-related endeavors.