After living with hyperinflation, currency fluctuations and minimal access to credit in his country, Wences Casares, an Argentine raised on a sheep farm, says he has the vision and team to make Bitcoin more widespread and accepted worldwide.
Mr. Casares, a veteran tech entrepreneur who hails from the tiny Patagonian town of Esquel, is setting his sights on an equally volatile space: virtual currencies.
Xapo, his new start-up that opened to the public this week, provides a Bitcoin wallet combined with a cold storage vault, allowing for transfers. The vault is a series of physical servers all over the world that has biometric access, security and is filmed around the clock, Mr. Casares said. The vault also comes with insurance, provided by the Meridian Insurance Group.
As security concerns abound for Bitcoin believers, especially after the recent collapse of the Mt. Gox exchange, Mr. Casares may have struck at the right time. An estimated 750,000 customers lost more than $450 million worth of Bitcoins when the site went dark and filed for bankruptcy last month.
The idea for the company germinated in early 2011 when Mr. Casares bought his first Bitcoins, three for approximately $3 a piece, he recalled.
He kept buying more. He then looked for a way to store them and so built a so-called vault for his personal collection. Soon after, friends began asking if they could also store their supply there and he obliged. Financial institutions made similar requests, and over the last year, Xapo stored Bitcoins for family offices, sovereign wealth funds, and hedge funds. The Argentine would not name them, citing confidentiality, but said about half were based in the United States and the rest spread over the globe.
On Thursday, Mr. Casares announced that Xapo, based in Palo Alto, Calif., received $20 million in funding in a round led by Benchmark Capital. Ribbit Capital and Fortress Investment Group also joined. Mr. Casares also has the tech credentials to win that kind of backing from Silicon Valley after having run Lemon, a digital wallet that was acquired last year by LifeLock for about $43 million.
Matt Cohler, a partner at Benchmark Capital and a former Facebook and LinkedIn executive, said he backed the company in part because he believed it was making an important contribution to building trust in the Bitcoin ecosystem.
He also noted that Mr. Casares’s experiences in Argentina and Brazil, where credit access remains scarce, have immense value.
“His personal passion for Bitcoin and his depth and breadth of expertise in global fintech are unparalleled,†Mr. Cohler said.
Wedbush Securities in a February research note estimated that nearly $86 million of venture capital has been invested in Bitcoin-related companies, mostly in the last 12 months.
Xapo’s team includes Federico Murrone, co-founder and chief operating officer, and a longtime associate, and Carlos Rienzi, its senior vice president of security, who was formerly a systems engineer at Cisco Systems.
Cindy McAdam is co-founder and president, and Mary Chan is controller. Ted Rogers joined Xapo this year as senior vice president of business development. He previously lived in Brazil and was a general partner at Arpex Capital, a venture capital firm. He is currently a limited partner at that firm.
Most of these people worked with Mr. Casares at his previous company, Lemon.
