Bitcoin financial institution River Financial caters to long-term investors, and its first cash infusion will help build out a suite of financial services around the cryptocurrency.
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Firms investing in the $5.7 million seed round include Polychain Capital, Slow Ventures, Castle Island Ventures, DG Lab Fund, Cygni, Pfeffer Capital Ltd. and IDEO CoLab Ventures, as well as several individual investors and advisers including Steve Lee of Square Crypto.
“We see River Financial as bridging the gap between traditional finance and Bitcoin,” Polychain Capital Founder Olaf Carlson-Wee said in a written statement. “The evolution of finance is only happening faster in the wake of the current global economic crisis, which has illuminated holes within traditional financial systems that can potentially be filled by Bitcoin.”
Cousins Alex Leishman and Andrew Benson founded San Francisco-based River Financial in early 2019 to offer a place for people to buy, sell, store and manage Bitcoin, Leishman told Crunchbase News. Many of the tools available to customers include tracking, moving Bitcoin around, as well as withdrawals and deposits via River’s Lightening Network.
“The product today looks a lot like a bank account, but with our take on Bitcoin,” Leishman said. “We would like to be able to offer different types of accounts, including joint and interest-bearing accounts.”
Leishman said he plans to use the new funding to make hires in engineering and operations, as well as to build out infrastructure. River Financial already made several hires in the past two months, but would like to get to 15 employees by the end of the year, he added.
Unlike some of his competitors, Leishman touts several differentiators of River Financial, such as building its own infrastructure versus using the cloud, having a live customer support system, and its new offering, Private Client, which focuses on family offices, high-net-worth individuals, and other investors looking to buy up to $250 million in Bitcoin.
“We are building the ‘Fort Knox’ of Bitcoin while also providing the kind of service that people expect at a private bank,” he said.
Since January, the company noticed the number of clients doubled each month, many of them over the age of 55, who Leishman said began buying Bitcoin to leverage against uncertainty in the market as the U.S. government continues to print money.
“Many of them bought gold and see Bitcoin as the modern version of gold,” he added. “We suspect part of the reason why they are interested is because we are the first company to demystify Bitcoin and give them the level of service they expect.”
Leishman and Benson spent 2019 building the foundation for the company and plan to use 2020 to scale. River Financial’s services are available in 15 states, and Leishman expects to be in 40 states by the end of the year, with a goal to enter New York in early 2021.