Simplex (SimplexCC Ltd.), an Israeli startup that enables Bitcoin purchases with credit cards has raised $7 million Series A in a round that included Bitmain, Cumberland Mining, and a number of unnamed individual investors.
Founded in 2014, Simplex offers a service that enables Bitcoin exchanges to accept credit cards at no chargeback risk.
The company’s platform utilizes fraud analysis and risk management tools to screen purchases made, delivering the ability to expand the total addressable market of Bitcoin by orders of magnitude while also accumulating user and identity data.
“Simplex brings Bitcoin purchasing to the mainstream by providing digital currency exchanges, brokers and wallets, with risk-free processing of consumer credit card purchases,” the company said in an email to SiliconANGLE. “Through Simplex’s API, Bitcoin sellers can offer customers credit card purchases without subjecting themselves to the risk of credit card fraud.”
Although those in the Bitcoin community will tell you how easy it is to buy Bitcoins, one often overlooked aspect, and arguably one that restrains its growth, has been the ability to buy Bitcoin using a credit card.
The main hurdle has been through the reasonable concern that Bitcoin purchased with credit card opens the doors to fraudulent purchases made using stolen credit cards, both from the financial institutions perspective: it’s near on impossible for a Bitcoin exchange to obtain a merchant account to accept credit card payments, and from exchange operators themselves who even if they could find a way to accept credit cards, would be faced with a high risk that they would be targeted by fraudulent purchases with the expense of related chargebacks then falling into their hands.
Simplex is so confident that its platform is able to filter out fraudulent transactions, they promise that even in the case of a chargeback they’ll still be paying the Bitcoin exchange the money due, and that’s one bold promise to make.
The service opened in beta in 2015 before fully launching this month, and lists its current clients as Genesis Mining, Spectrocoin and Bits of Gold, among others, and claims to have already processed nearly $3 million in transactions in that time.
Including the new round, Simplex has raised $8.4 million to date.
The company said it would use the new funds to increase its headcount and expand its offering to more Bitcoin exchanges and related businesses.