coindesk.com
Stablecoin payments startup Velocity raised another $10 million from investors including Visa (V), Circle (CRCL) and Ripple, extending a Series A that now totals $48 million as financial heavyweights push deeper into blockchain-based payments infrastructure.
Haun Ventures, Translink Capital and Mirana Ventures also participated in the extension, which follows a $38 million Series A announced in July.
The new investment valued the London-based firm at $200 million post-money, CEO Eric Queathem told CoinDesk in an interview. The original Series A round was oversubscribed, he said.
The funding comes as stablecoins, or cryptocurrencies tied to fiat money, are becoming a bigger part of global money movement. Once used primarily by crypto traders to shift dollars between exchanges, stablecoins have grown beyond $300 billion in circulation and are increasingly being used in payments, cross-border transfers and corporate treasury operations.
Velocity is going after the infrastructure behind those transactions. Its platform is designed to let payment companies and banks use stablecoins for settlement, liquidity and treasury operations without ripping out the systems they already use.
Payments plumbing
Queathem previously worked at Worldpay, which settles more than $2 trillion in annual payments volume. That experience helped shape the idea for Velocity. While consumer-facing payments have improved dramatically, much of the infrastructure moving money between issuers, card networks, acquirers and merchants remains cumbersome.
“All this capital has flowed into payments over the last 15 years, and it's been 100% focused on how do you create a better experience on the front end for consumers,” Queathem said.
“But no one has fixed the back-end layer.”
Visa's investment is particularly notable because Velocity does not see stablecoins as replacing cards. The company expects blockchain-based digital money to sit underneath existing payment experiences, handling more of the funding and settlement that happens behind the scenes.
“Stablecoins are playing an increasingly important role in reshaping how value moves across the Visa ecosystem,” Rubail Birwadker, Visa's global head of growth products and strategic partnerships, said in a statement. Velocity, he added, is building infrastructure to bring “stablecoin-powered money movement to every business.”
Velocity Chief Growth Officer Matt Larson expects much of that shift to be invisible to consumers.
“It probably doesn’t lead to all of us switching to have stablecoin wallets as users,” Larson told CoinDesk. Instead, he said, “all of the funding, all of the settlement” flowing around card networks could increasingly move toward stablecoins.
Queathem expects global companies to eventually keep at least some of their capital onchain, creating demand for reconciliation, treasury management and other infrastructure connecting blockchain-based assets with existing financial systems.