Buttercoin was a private American start-up company that provided digital currency exchange services to the US. Specifically, Buttercoin operated a full order book trading platform for buying and selling bitcoins.
- Country: United States
- Headquarter: Palo Alto
- Type: Infrastructure
- Round: First
- Cost: $1.25 million
- Date: 1-Sep-2013
- Investors: Alexis Ohanian, Centralway, FLOODGATE, Google Ventures, Initialized Capital, Rothenberg Ventures, Y Combinator
Following the events of April 2013 in which Bitcoin value dropped dramatically as a result of the short comings of existing exchanges it was decided that there should be a community driven and open source exchange. As such Buttercoin was born out of neccesity for this. Buttercoin allows the decentralisation of exchange between Bitcoin and other currencies.
On April 6, 2015, citing a loss of interest in bitcoin from venture capital firms, the company announced that it was shutting down as of April 10, 2015.
Y Combinator, Google Ventures (Kevin Rose and Chris Hutchins), Floodgate, Initialized Capital, Rothenberg Ventures, and Reddit co-founder Alexis Ohanian invested approximately $1 million into Buttercoin. A Swiss company, Centralway Ventures, invested an additional $250,000 into Buttercoin. Combined with other sources, Buttercoin raised a total of $1.6 million as of September 2013. Subsequently, Buttercoin raised an undisclosed sum from Wedbush Securities, making it the first bitcoin company to receive investment from a large Wall Street institution.
Interview with CEO
A week after the abrupt closure of your startup, Buttercoin CEO Cedric Dahl said that the wider community should be careful to learn from his experience at the helm of the Bitcoin market the USA. Despite accruing an impressive list of investors including Google Ventures, Centralway Ventures and Y Combinator, Dahl suggested that it was Buttercoin affiliation with major investment companies, which ultimately left him less able to adapt to changing Bitcoin ecosystem.
He told CoinDesk: "The big lesson is that you can't rely on the enterprise. You have to make a product that is self-supporting.»
Founded in 2013, Buttercoin attracted $ 1.3 min of funding, capital that helped make the launch of "one look" on a crowded market. However, in retrospect, Dahl wouldn't have tried to raise venture funds at all, he said, calling the decision a "tactical mistake." "There's a lot more seed money out there. It's much easier to raise, whereas the venture, if you're not able to get it, the funding is over. With seeds and angel money, you can keep going," he continued.
After the move, some of the company's higher profile customers have already reported a change of market provider, with MegaBigPower Dave Carlson entering into a business relationship with the push VC backs of the Hedgy launch. The last full day of Buttercoin operational activities was April 10, with employees scheduled to depart at the end of the working day on April 15.
- Buttercoin Official website