Tim Draper Leads $2.5M Funding Round For Crypto Startup Ark Labs By Reuters

By Niket Nishant

(Reuters) – Ark Labs, a three-month-old startup developing solutions to speed up bitcoin transactions and reduce costs, has raised $2.5 million in a pre-seed funding round led by billionaire investor Tim Draper .

In addition to venture capital firm Draper Associates, Fulgur Ventures, Axiom Capital and angel investor Stephen Cole also participated in the round, the startup said Thursday.

WHY IT’S IMPORTANT

The funding underscores Silicon Valley’s growing interest in companies trying to make crypto, particularly bitcoin, a mainstream form of payment.

The world’s largest cryptocurrency has turned into a formidable asset class, with billions of dollars in inflows from traders, especially after exchange-traded funds that track its price were approved in January.

However, some analysts say that bitcoin will need to have more utility to sustain its high level of interest.

Ark said it will use the funds to expand its team and improve its technology.

CONTEXT

Draper, who founded Draper Associates in 1985, has also invested in SpaceX, Tesla (NASDAQ: ), Coinbase (NASDAQ: ) and Robinhood (NASDAQ: ).

It also led a funding round in bitcoin lending company Zest Protocol in May.

KEY QUOTE

“Today, we need to focus not only on how to buy and store bitcoin, but also how to use it as a medium of exchange for everyday purposes,” Draper said.

Ark enables “seamless bitcoin payments,” he added.

“Adoption faces headwinds until any non-technical person can safely gain exposure,” said Henry Robinson, co-founder of crypto mining company Decimal Digital Currency.

“As mature investors and mature capital with longer time horizons grow their positions in bitcoin, the asset class will mature and their approach will trickle down to individual asset and fund managers.”