Secure bitcoin storage service Xapo Ltd. has managed to raise $20 million in first-round funding from Benchmark Capital, Ribbit Capital, and Fortress Investment Group LLC.
The service, which has several thousand accounts set up, is fully insured by Meridian Insurance, and will allow end users to safely store away their bitcoins in addition to using a web-based bitcoin wallet.
The company’s servers are set up in undisclosed locations below ground, protected by armed security guards, according to Wences Casares, Xapo founder and CEO.
“We are the first Bitcoin vault fully protected and insured against hacking and bankruptcy,” he said.
In a time when talk of securely storing bitcoin funds has become commonplace (particularly in the wake of the Mt. Gox disaster, where over 700,000 BTC belonging to customers was “lost”) Xapo’s service could very well be in-demand.
“We have been talking to Wences about Bitcoin for quite a long time and we think Xapo offers a unique wallet-with-vault service which is secure offline and online and therefore compelling for institutional as well as retail investors,” said Matt Cohler, partner at Benchmark.
Quite obviously, the bulky investment (the second largest in the bitcoin realm, behind Coinbase’s $25 million), will be used to grow the service as more customers come aboard.
Casares started the company two years ago while he was CEO of Lemon.com, a company recently acquired by LifeLock. [source: BusinessWeek]