Bitcoin, the controversial digital currency that handles peer-to-peer cash transactions without the need of a bank, became one of the darlings of VCs a couple years ago.
But Jalak Jobanputra, founding partner of early-stage firm FuturePerfect Ventures, believes the potential of bitcoin has now shifted to the technology behind the screen that makes the currency work.
“The opportunities have moved away from bitcoins to blockchains,” said Jobanputra, who is based in New York City. “The money to be made will come from the distributed ledgers and not digital currency.”
Online trade news publication Coindesk recently reported that $485 million was invested in the bitcoin sector in 2015, and noted the increasing interest on the part of banks and other financial service companies that see blockchain technology being used to cheaply process such transactions as stock trades and real estate sales.
Jobanputra is investing out of a $50 million first fund, which she expects to close by spring. Her average investment runs about $500,000, but she has done deals in higher amounts.
In September 2015, FuturePerfect participated in a $12 million Series A round in Abra, a Mountain View, Calif.-based startup developing a service for cross-border remittances by repurposing blockchain technology.
The long list of VCs participating in the round included American Express Ventures, Arbor Ventures, Blockchain Capital, Carthona Capital, Cyanotype, Digital Currency Group, First Round, Haystack, Jungle Ventures, The Launch Fund, Lerer Hippeau Ventures, Liberty City Ventures, NYCA, Pantera Capital and RRE Ventures. Tata Group Chairman Emeritus Ratan Tata also invested in the round.
FuturePerfect earlier participated in a $2 million seed round in the company in March 2015.
Meanwhile, the firm has also invested in Luxembourg-based Blockchain, which has received $30 million so far, from such investors as Lightspeed Venture Partners, British entrepreneur Richard Branson and Wicklow Capital.
The startup operates the largest bitcoin wallet in the world, which allows bitcoin holders to send, receive and securely store their crypto-currency.
Blockchain hopes to avoid the series of breaches and thefts of bitcoins that have plagued several wallet companies in the past, including Mt. Gox and Bitstamp, said Jobanputra, who previously served as a director at Omidyar Network and was a partner at RTP Ventures before she launched FuturePerfect.
“When we get to using blockchains in different use cases or asset classes, authentication, security, and identity are going to be large pieces of the puzzle to solve,” she said.
In June 2015, FuturePerfect led a $1.5 million seed round in Case Wallet that included RRE Ventures, High Line Venture Partners and the Rochester Institute of Technology Fund.
Jobanpurtra’s interest in bitcoins came after spending time in Africa analyzing the popularity of mobile money service platform M-Pesa, a mobile phone-based system that Vodafone helped launch in 2007.
The service, featured on CBS’ “60 Minutes” last November, allows users to deposit money into an account stored on their cell phones.
Jobanputra said she continues to search for companies that are working on infrastructure solutions that are high volume or high value, where any piece of data can be authenticated on the blockchain.
“I look for ground-breaking, paradigm shifting technologies,” she said. “The more time I spent, the more I understood the potential of the technology, and the more excited I became about how much is possible with this decentralized distributed architecture.”
Tom York is a San Diego-based contributor. He can be reached at tom.york@gmail.com.
To download an Excel file: Active targets in bitcoin space to have raised funding recently
Photo: Bitcoin coins are seen in an illustration picture taken at La Maison du Bitcoin in Paris, France, May 27, 2015. REUTERS/Benoit Tessier
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