Kleiner Perkins Makes First Bitcoin-Related Deal With Align Commerce

Marwan Forzley, founder and CEO of Align Commerce
Align Commerce

Align Commerce Corp.’s use of bitcoin is invisible and almost irrelevant to its business customers. And that’s how the startup wants to keep it.

The San Francisco company, which is announcing today that it has raised a $12.5 million Series A round led by Kleiner Perkins Caufield & Byers, is one of an emerging class of bitcoin-based companies that rely on the digital currency behind the scenes. It’s being used as a tool to provide an improved financial service–in Align’s case that’s cross-border payments for small businesses.

That’s different from the earlier crop of startups that attracted venture capital, such as Coinbase Inc., and BitPay Inc., many of which have been trying to enable consumers to buy bitcoin, store it in digital wallets, trade it on currency exchanges, and use it to make payments and capital.

Align’s customers, by contrast, pay each other using government-issued currency and do not directly deal
with bitcoin. Align takes the payor’s currency, exchanges it into bitcoin, and then exchanges the bitcoin to the payee’s currency. In this way, the startup avoids the cumbersome bank wire transfer process, said Marwan Forzley, chief executive and founder, who launched the company after several years as general manager at Western Union .

This is Kleiner’s first deal in the bitcoin sector. “I’m not a currency speculator,” said Randy Komisar, general partner at Kleiner who is joining Align’s board, about his lack of interest in investing in bitcoin startups previously. With Align, “there’s no speculation. They don’t hold [bitcoin],” Mr. Komisar said.

Nonetheless, Align and other startups that refer to themselves as “blockchain” still rely on bitcoin having value and liquidity as a digital currency. “Yes, I would like bitcoin to be traded in volume,” Mr. Komisar said. “But I don’t care whether the currency is going up or down in price.”

Bitcoin transaction volume, meanwhile, has stayed relatively steady over the past two years, according to charts on Blockchain.info, with daily volumes rarely crossing above 500,000 bitcoin.

To learn more about Align’s business and plans, read the full article in Dow Jones VentureWire.

Write to Yuliya Chernova at yuliya.chernova@wsj.com. Follow her on Twitter at @ychernova