Secretive Bitcoin Startup 21 Reveals Record Funds, Hints at Mass Consumer Play

For the past year and a half, a Silicon Valley startup has quietly convinced some of the biggest names in venture capital to back its effort to turn the technology behind bitcoin into a mass-marketed phenomenon.
Now, that company, which bears the name 21 Inc., is emerging from stealth to announce it has raised $116 million in venture funding, the most ever by a startup in the digital-currency sector, based on data from bitcoin news service Coindesk.
What the San Francisco company isn’t yet publicizing is the precise nature of its operations. Chief Executive and co-founder Matthew Pauker will only say there will be ‘several interesting developments over the next weeks and months’ about software and hardware products designed ‘to drive mainstream adoption of bitcoin.’
Since its launch six years ago by a mysterious coder who used the presumed pseudonym of Satoshi Nakamoto, bitcoin has drawn media attention as a wildly volatile digital currency. But amid stories of scandal, theft and turbulent prices, the general public has largely ignored the arguments of vocal supporters, who tout the digital currency’s potential to cut costs by removing middlemen from finance and commerce.
According to Silicon Valley investors such as those taking stakes in 21, that failure to gain mass adoption is partly because the public’s attention has been misguidedly focused on bitcoin’s limited potential as a digital alternative to traditional currencies. In reality, they say, its underlying technology has far wider applications than that. Unlike the currency transactions that are generally associated with bitcoin, new uses could range from lawyer-free smart contracts to tamper-proof online voting systems.
21′s lead investors include U. S. venture-capital heavyweights Andreessen Horowitz and RRE Ventures, along with Chinese private-equity firm Yuan Capital, with a strategic stake going to chipmaker Qualcomm Inc. QCOM -1.13% through its venture-capital unit

This post was published at Wall Street Journal on Mar 10, 2015.