Japanese bitcoin exchange bitFlyer raises ¥510,000,000 ($4M USD), from investors including the venture capital arm of Mitsubishi UFJ Financial Group Inc, the second largest publicly traded Japanese company.
This funding round brings the total amount of capital raised by bitFlyer to $6.9 million. Japanese venture capital firms Venture Labo, Mitsui Sumitomo Insurance, Dentsu Digital Holdings, financial media group Quick, and Mitsubishi UFJ Capital Company Limited participated in the round.
bitFlyer is the first bitcoin, or blockchain, investment for Mitsubishi UFJ Capital Company Limited (MUCAP), one of the oldest leading venture capital firms in Japan. MUCAP currently has funds of approximately $500M invested in over 500 companies, has financed more than 1000 companies, and more than 290 of those have gone public.
As part of the Mitsubishi UFJ Financial Group (MUFG), and of the wider Mitsubishi group of companies, MUCAP has strong connections in the Japanese market. MUFG is a Japanese bank holding and financial services company headquartered in Chiyoda, Tokyo, Japan. It held assets of around US$2.5 trillion as of March 2013.
bitFlyer CEO and founder Yuzo Kano said in an official statement that the funds raised by the company would be used to bolster the exchange’s security and improve its management system. “In addition, bitFlyer will take advantage of synergies available with each investment organization, and will continue to promote customer base expansion, strengthen revenues, and expand our global business development.”
In a previous funding round, the bitcoin firm suggested that Singapore might be “a likely target” for international expansion, but that nothing was certain. China, the Philippines, Indonesia, and Australia could also be targets for the exchange, as each has a growing and sizeable market for digital currency.
Like so many businesses and products marketed to the island nation, bitFlyer has used previously raised funds to create a truly Japanese experience, with a features list that is much larger than its counterparts in the West. An institutional exchange for professional traders, a blockchain visualizer and explorer, an advertising network built on bitcoin, a marketplace, and a crowdfunding website are among the services offered by the firm, in addition to its consumer exchange business.
bitFlyer was founded in April of 2014 by a former Goldman Sachs trader, and aimed to fill the gap in the Japanese market after the country’s, and world’s, largest bitcoin exchange at the time, Mt.Gox, shut down after losing bitcoins worth hundreds of millions of dollars.
Mt.Gox, and the legal fallout following its demise, is still being figured out in Japanese courts, and for many who lost money because of it, security is a high priority. bitFlyer has said that they will used some of the newly raised funds to continue to bolster its security.
The firm has already made big steps towards greater security, including the implementation of multi-sig earlier this year. The company gives a user one or more of three private keys, with the remaining go to the exchange. This allows the user to recover funds in case of the exchange collapsing.
bitFlyer also recently launched a new user experience that is meant to attract business, and drive bitcoin adoption. The exchange is running a promotion to encourage new members by offering freshly opened accounts with deposits of ¥10,000 ($80) or more the chance to win ¥10,000. The promotion ends August 30th when 10 winners will be selected.