Coinify Becomes Leading European Bitcoin Payment Firm

Bitcoin merchant network Coinify recently acquired payment processor Coinzone. Coinify’s total merchant network now stands at 10,000, following the addition of 2,000 businesses accepting bitcoin using Coinzone. The move also means a change in strategy for the Dutch startup, which is now seeking to onboard payment processors with already established networks, rather than signing up individual businesses.

“We welcome aboard Coinzone’s merchants and partners to Coinify, and will make sure that we continue the good work of Coinzone. Coinzone has done a remarkable job, especially considering its short time in the market.”
— – Mark Højgaard, Coinify CEO

The majority of Coinzone’s employees will be let go at the end of a transition period, including its management staff. The firm’s sales team will stay with Coinify due to their experience in signing up European payment processors. Firms like BitPay and Bitnet in the US have already implemented the strategy of targeting established merchant networks, but the same has yet to happen in Europe.

Coinify’s CFO and head of strategy said in a statement that, “Coinzone’s established presence in Europe, especially in the most active countries of France, Germany, Spain, Italy and Romania, and the recent market entries in the UK, the Czech Republic and Poland – is 100% in line with our strategy to accelerate the expansion in these important markets.”

Coinzone’s payment service and website will be shut down later this year. Conify encourages merchants to begin switching over to their platform as Coinzone will stop processing transactions on August 28,  sending its last merchant payout on August 31. Coinzone’s Mihal Manolu will stay on as regional manager to help merchants transition during this period.

Outgoing Coinzone CEO Manuel Heilmann said that his desire to return to the e-commerce industry was one of the reasons that motivated him to sell to Conify. He added that he would remain an advocate for the technology behind Bitcoin.

“We reached out to Coinify as we believed that we could strengthen the position of a European-based Bitcoin provider. Coinify has a strong financial management team, supportive investors behind it, and together with the strong position that Coinzone has built over the last few years, we look forward to even more growth with Coinify.”
— – Manuel Heilmann, Coinzone CEO

Before Hilmann founded Coinzone he spent 13 years working for MyCommerce, as vice president and general manager. The company was one of the first businesses to focus specifically on online commerce, and he helped build a presence for the company in the United States, Europe, Asia, and the Middle East.

The news comes just days after bitcoin remittance startup 37 Coins announced they would be shutting down due to a lack of traction among consumers. The company had a developed a sms-based bitcoin payment service that was meant to enable people with less advanced phones, in developing countries, to be able to use digital currency.

“The decision to cease operations and to shut down our service was difficult. Despite the best of intentions, we were unable to deliver a quality product that showed product-market fit. We also found that SMS delivery between different carriers in countries outside the USA is unreliable,” read a blog post announcing the closure.

The firm had raised a sum north of $500,000 USD, and graduated from the famed startup accelerator Plug and Play as part of a special Bitcoin program.

Coinzone and 37 Coins are just latest ventures to close, in a year that has seen numerous bitcoin startups acquired or shut down. Earlier this week, Latin American bitcoin exchange meXBT acquired Singapore-based bitcoin exchange Coin Republic, which operates in several Asian markets. Canadian bitcoin exchange Cavirtex temporarily shut down earlier this year due to being hacked, and sensitive customer information being released, but New York bitcoin startup Coinsetter bought the company and reopened it.

Some bitcoin startups have not been so luckily. Bitcoin marketplace, Brawker, and American bitcoin exchange, Buttercoin, both shut down earlier this year after running out of venture capital. Both firms were unable to be meat growth expectations, in an ever changing digital currency business environment. The two startups raised a combined sum over $1.5MUSD, from investors including Y Combinator and Google Ventures.

Many industry analysts expect this trend to continue throughout this year and the next. The transition from a focus on bitcoin to blockchain technology could lead many older startups in the areas of bitcoin payment processing, exchanging, and other services with either the choice to shut down or be acquired as venture capital dries up.