When bitcoin-based peer-to-business lender Bitbond raised €200k in August 2014, we promised to keep a watchful eye on its progress. The platform has now raised a further €600k of equity.
Bitbond launched in July 2013 and has facilitated over 600 loans to date. The platform raised €200k in August in the form of seed-stage capital, designed to jump-start a cutting-edge, cross border bitcoin lending service – targeted at small businesses from around the world. That initial capital influx was spearheaded by Point Nine Capital, which has returned to lead this latest €600k round. The VC firm was accompanied by a number of prominent Angel investors. The purpose of the €600k is to expand the Bitbond’s user base and to enlarge its footprint within the frontier markets.
Emerging Crowd – an early-stage equity (with a sprinkling of debt) crowdfunding platform – recently produced a summary of what it perceives to be the hottest emerging markets. Placed in second on that leaderboard was Kenya – a market that Bitbond appears to be active within. The bitcoin platform’s current loan opportunities also include business loans in Brazil, Indonesia and Singapore.
Bitbond currently advertises a peachy estimated return of 13% per year. But P2P-Banking.com’s Claus Lehmann believes there’s work to be done in terms of the lender’s debt collection processes – an inevitable problem area for a platform upon which borrowers are not contained by national borders.
Radoslav Albrecht, Founder & CEO of Bitbond, offered his take on this latest funding round:
“The additional resources will help us to continue realizing our mission which is to make lending and borrowing globally accessible. We are happy to have such experienced investors supporting us on this exciting journey.”
As we wrote back in August, dealing in a global currency frees Bitbond users from the potential cost of fluctuating exchange rates. But the trade-off is taking exposure to the volatility of bitcoin – which is perhaps the greater peril. Bitbond has attempted to solve this conundrum by also offering users exchange rate linked loans.
Bitbond is targeting a global SME credit gap that, according to data from the International Finance Corporation of the World Bank, is $2 trillion wide. In the wake of the platform’s seed stage fundraise, Bitbond boasted a user base of 4,100 people – hailing from over 100 different countries. The extra €600k of resources should help to expand that global community.
The primary challenge for Bitbond will be that it marries two concepts – peer-to-peer lending and digital currency – that are caught up in the lengthy process of barging into the mainstream. Awareness, and crucially understanding, of both halves of the Bitbond equation remains low – for now.