CoinJar is a Melbourne-based startup that has developed a digital wallet that lets people buy, sell and accept Bitcoin as a merchant.
Co-founders Asher Tan and Ryan Zhou saw a gap in the market for an easy-to-use digital wallet that could introduce new people to Bitcoin.
“We’ve had a lot of ideas around what Bitcoin can do, but I haven’t seen anyone execute them really well,” Tan told Techworld Australia
CoinJar has about 13,000 users, all from Australia, Tan said. While any user can act as a merchant without having to get a special account, he estimated about 20 businesses are actively using CoinJar to accept Bitcoin payments.
Two Australian companies that use CoinJar to accept Bitcoin payments are VPNSecure and Tomcar Australia. The customers recently told us that they believe accepting Bitcoin is an effective way to drum up more business with fewer fees and greater privacy for customers.
While there has been debate over the sustainability of Bitcoin, Tan said he sees that as a good omen for CoinJar.
“The most disruptive [technology trends] are the ones that have the grey areas or the question marks over them.”
Tan has an economics background and became interested in BitCoin and startups after meeting his co-founder, 19-year-old Ryan Zhou.
But when they applied for the AngelCube incubator program in Melbourne last April, CoinJar was not their first pitch. Instead, they proposed a business related to eating and networking, he said.
However, in the final round of the application process, AngelCube founder Adrian Stone asked Tan and Zhou if they had any bigger ideas. “We mentioned Bitcoin and that’s where it really started,” said Tan.
AngelCube provided $20,000 to get the project started. Since then, the company has received $450,000 in funding from Blackbird Ventures and a variety of smaller private investors.
Besides the cash, the investors have extensive experience in startups and are acting as mentors to the team at CoinJar, Tan said.
“Most of our focus right now has been helping people acquire Bitcoins for the first time,” said Tan. “As we go further, merchant adoption will play a bigger part of our role.”
CoinJar currently has a staff of four but plans to expand to six next month, he said. “We are getting Australia and the whole operation a lot more finely tuned.”
In addition, CoinJar is preparing for international expansion, he said. New Zealand will probably be first and others will follow in the second quarter of the 2014 calendar year, he said.
The company plans to keep its headquarters in Australia, “but there is a larger global market we’re trying to tackle.”
The future of Bitcoin
Tan said he believes Bitcoin is unlikely to replace traditional currency, but rather is complementary. “Bitcoin is the currency of the Internet.”
“It works great as a parallel currency,” he said. “No one’s really forced to use it. People use it because they want to see the benefits of it.”
Tan said the decentralised nature of the Bitcoin network is a big advantage of the digital currency. He compared it to social networks, “where a group of people who are loosely affiliated sometimes have stronger bonds in this online digital world than small tightly knit networks which find it hard to grow and have central points of failure.”
The framework needed to support Bitcoin has grown in 2013, he said. “This year has been a really good year in Australia for Bitcoin. A lot of services, mine included, have really pushed for basic infrastructure.”
In addition, he said there is greater awareness of Bitcoin in the mainstream. “Bitcoin has made its way from the obscure section of the newspaper to the front page of Finance.”
The next step for Bitcoin is to create killer applications that drive greater adoption of the digital currency, he said.
As part of an “early wave” of Bitcoin companies, CoinJar has watched a market in flux, Tan said. “We’ve had competitors who are not around anymore, and there will be more coming up, definitely.”
Many previous Bitcoin companies “were individuals and fly-by-night operations. I think we’ve really gone the step to try to push as much transparency as possible. We put our faces out there. We put our names out there.”
Tan said he is upbeat about Australia’s startup ecosystem.
“Getting into the startup scene was a lot easier than I had expected” thanks to a large amount of support by other people working on startups, said Tan. “I was really encouraged early on.”
“The Melbourne startup scene has grown tremendously in a short period of time. I think interest in startups is higher than ever.”
However, the ecosystem is still very young, he said.
“Probably what’s missing from the Australian startup scene … is more global successes,” Tan said. “It is sort of trendy to get into startups, but at the end of the day the stats show not many Australian-based startups have made it to the world stage.”