Bitcoin ‘neobank’ Shakepay raises $44M from investors to drive growth

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Shakepay, a fintech company with ambitions to replace Canadians’ savings accounts with bitcoin, has raised $44 million to expand its team and create new financial products.

The Montreal-based startup, founded in 2015, allows users to buy bitcoin and ethereum cryptocurrencies, send them to other users, and sell them commission-free.

The company’s signature feature, for which it is named, prompts users to shake their smartphones daily to earn small amounts of bitcoin, also known as satoshis (named after Satoshi Nakamoto, the pseudonym used by the or the people who published the original bitcoin white paper in 2008). Users are incentivized to maintain a shaking streak as they earn a greater amount of satoshis – 100 million satoshis make one bitcoin – for each consecutive day someone shakes their phone.

Shakepay also offers a prepaid Visa card that offers 1% cashback in bitcoins on purchases. The company earns revenue on the spread between the bid and ask prices of cryptocurrency transactions – the price for buying bitcoin using the app is higher than for selling it.

Jean Amiouny, co-founder and managing director of Shakepay, said his company looked like a “bitcoin neobank”. Neobanks are digital challengers to traditional financial institutions that often tout lower fees and a smoother customer experience compared to established banks.

QED Investors, a US-based venture capital firm specializing in fintech, led the latest round of funding, giving Shakepay a valuation of $313 million. Toronto-based Golden Ventures also participated in the round, along with “several product managers” from Shopify Inc., according to Shakepay.

QED was founded by Nigel Morris, co-founder of Capital One Financial Corp. Matt Burton, partner at QED, will join Shakepay’s board of directors.

Mr. Amiouny told The Globe and Mail that the company’s mission was “to usher in the golden age of bitcoin” and lead Canadians to adopt bitcoin as a “monetary standard” at par with the dollar. Canadian. So far, over 900,000 Canadians have created Shakepay accounts. The company, which now has 75 employees, operates in all provinces and territories and is focused on expanding into the Canadian market.

It started by allowing users to upload their bitcoin to a Visa card, making it easy to spend cryptocurrency.

“Back then, the narrative around bitcoin was an internet currency, you wanted to spend it,” Amiouny said. “Slowly, this narrative evolved into a store of value. Bitcoin became a store of value over time, and we realized that I no longer wanted to spend my bitcoin.

Shakepay set out to create an easy-to-use app where ordinary people could buy and sell bitcoin. The company is now focusing on helping users accumulate crypto in their accounts, which Amiouny sees as a better way to save money than many other options.

“Generally savings are broken in Canada,” he said. Low interest rates make it unattractive to put your money in a savings account, especially during times of high inflation. Out of necessity, he said, Canadians have turned to investing in stocks and real estate. Mr. Amiouny sees bitcoin as a better alternative and is optimistic about its potential for long-term appreciation.

“We really believe that bitcoin is the best savings account, and so we’re going to build new products around that thesis.”

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