Coinbase is now officially the bitcoin industry’s first billion-dollar startup. On August 11, Coinbase CEO Brian Armstrong revealed that the company has secured a US$100 million funding round from Spark Capital, Greylock Partners, Battery Ventures, Section 32 and Draper Associates, led by IVP.
Said Armstrong in a statement:
“Coinbase experienced unprecedented growth over the last year, and we have now exchanged over $25 billion USD of digital currency for our customers. We’ll be using this new funding to continue scaling even further.”
With the newly obtained capital, Armstrong and the rest of the Coinbase team intend to pursue aggressive international expansion by increasing the size of its development and customer support teams. More importantly, Armstrong noted that a new office for its trading platform GDAX would be launched in New York City to serve institutional investors and professional traders.
Almost immediately after an Ethereum flash crash occurred in late June, GDAX general manager Adam White announced that Coinbase had decided to reimburse its users millions of dollars despite the fact that all of its systems had functioned properly throughout the flash crash. According to White, this was done in order to build GDAX into a leader amongst all global exchanges.
White also wrote:
“Our long-term ambition, however, is to be a leader among all exchange platforms and we are committed to serving as the most trusted provider to the world’s largest institutions and professional traders. We are confident that all trades this week were executed properly, however, some customers did not receive the quality of service we strive to provide and we want to do better.”
The expansion of GDAX and targeting of institutional and professional traders is a major part of Coinbase’s long-term vision and of its latest US$100 million funding round.
Bitcoin’s First Billion-Dollar Company
With the closure of its US$100 million Series D funding round, Coinbase is now officially the bitcoin industry’s first billion-dollar company. Previously, prior to the completion of the deal, various trusted sources including the Wall Street Journal reported that Coinbase was aiming to raise a hundred million dollar investment based on a US$1 billion valuation.
However, according to TechCrunch, Coinbase raised US$100 million at a US$1.6 billion valuation. According to Flitz Tepper of TechCrunch:
“While Coinbase had previously raised a total of $106M, it’s been two and a half years since their last raise – which was their $75M Series C round in early 2015. But it seems that the wait paid off, as the recent growth allowed the startup to nearly triple their valuation to $1.6B, from a rumored $500M in 2015.”
Coinbase’s Poor Customer Support, Company Plans Improvement
Coinbase’s poor support has always been at the center of criticisms of the company. Over the past few years, investors and traders on Coinbase have consistently expressed their concerns over Coinbase’s inefficient customer service, specifically the fact that the company does not provide 24/7 service through a live communications platform or phone line, unlike other exchanges.
For instance, Bithumb, South Korea’s largest bitcoin exchange, offers a 24/7 phone line and live chat with a large-scale team of communications directors and customer service agents.
Bithumb, which processes more trades than Coinbase, has 24/7 customer support via phone & live chat. Importance of customer support #bitcoin pic.twitter.com/IlFkt7srQf
— Joseph Young (@iamjosephyoung) July 7, 2017
With the newly acquired capital, Coinbase aims to dramatically improve its customer service capability and promises to offer efficient services to its consumers, particularly institutional and professional traders. Said Armstrong:
“Specifically, we will: Increase the size of our engineering and customer support teams to improve the customer experience.”