Ledger closed a €1.3 million seed funding round led by XAnge Capital. The hardware wallet company's raise marks one of the few major venture investments in physical Bitcoin storage devices. Hardware
Ledger closed a €1.3 million seed funding round led by XAnge Capital. The hardware wallet company's raise marks one of the few major venture investments in physical Bitcoin storage devices.
Hardware wallet companies attract less venture funding than software wallet startups. Most money flows to exchanges and wallet apps, leaving hardware makers to search for investors. Ledger's round stands out because the company managed to secure backing from top-tier investors in a market venture firms had overlooked.
The company builds a solution for a real problem. Software wallets on computers and phones expose users to hacking and malware attacks. Ledger uses smartcard technology, the same chips in payment cards and passports, to keep private keys isolated from the internet. CEO Eric Larchevëque attributed the quick close to the market's growing demand for Bitcoin security. "Having successfully closed our seed round only two months after the public launch of our first consumer ready product is not only showing the growing interest for the Bitcoin ecosystem, but also the very strong technical differentiator Ledger is bringing to the industry," Larchevëque said.
Smartcard technology offers distinct advantages. Users recognize the technology from credit cards and ID documents. The form factor is small and portable. Private keys stay on a separate chip, preventing malware from stealing cryptocurrency even if a user's computer is compromised. Ledger open-sourced the operating system that runs on its hardware, LedgerOS, to let users inspect the code. Competitors charge more and offer less mature software, giving Ledger an edge in a nascent market.
XAnge Capital led the round, with additional backing from Hi-Pay (part of Hi-Media Group), Fred Potter from NetAtmo, Pascal Gauthier (former COO at Criteo), Thibaut Faurès Fustel de Coulanges (vice president of Rentabiliweb Group), and Alain Tingaud Innovations.
With funding in place, Ledger plans to open a US office in San Francisco under a subsidiary called Ledger Technology Inc. The company will improve its wallet software and release apps for Android and iOS later this year. Ledger Blue, a new hardware device launching in the fourth quarter, will have a screen, keyboard, and wireless connectivity via NFC and Bluetooth, making it easier to integrate with phones and payment terminals.
Ledger is also developing hardware security modules for exchanges and payment platforms that need to process hundreds of transactions per second. Those products arrive in 2016.
The company is working on LedgerOS TEE, a trusted execution environment that would run on smartphones. If successful, users could sign transactions on their phone without needing a separate hardware device, shifting how Bitcoin transactions get secured.
