Big Investors Put $2.25 Million Behind Bitcoin Reward Startup Lolli


(Photo by Iren Moroz/Getty Images) Getty

In a recent seed funding round Bitcoin rewards startup, Lolli, amassed $2.25 Million from an impressive array of investors including Bain Capital Ventures and Version One. A number of others, including Forerunner Ventures, 3K VC, SV Angel, FJ Labs, Alex Chung, Gokul Rajaram, and Brian Sugar, also contributed to boosting the unique cryptocurrency business.

Lolli allows users to accumulate Bitcoin rewards when they shop at partners of the company. The firm already has over 500 partners like Hilton, Marriot, Walmart and Forever 21. The idea is to give the users up to 30 of the money that they spent back in Bitcoin.

One of the reasoning for the creation of Lolli, according to Alex Adelman, its creator and CEO, is that Lolli will aid in building a strong use case for Bitcoin and assist in adoption and normalising of digital currencies.

Attracting the big names

As a company, Lolli has had some success already with reports of thousands of clients and they have also apparently processed six figures in sales. However, the interest of the investors from this seed round, and the gravitas of them seems to suggest there is more to it than just a cryptocurrency reward program.

Traditional investors are of course looking more and more at cryptocurrency and blockchain projects, but some have even reached a level where they understand that it is not only a get rich quick scheme.

Scott Friend, the Managing Director of Bain Capital Ventures, explains how they have identified one issue with Bitcoin, in general, is its lack of distribution.

“We have been active investors across both the commerce-tech and cryptocurrency landscapes for many years,” Friend explains. “We have recognised that Bitcoin has a distribution problem. Mainstream adoption is low because the only way you can get Bitcoin is via investing or mining.”

“We have also seen little innovation in the work of affiliate marketing for brands and retailers for many many years with last-generation affiliate networks and marketing channels still dominating the brand and retail marketing landscape. This despite a relatively inequitable balance of value between consumers, retailers, and the network… and then in walks Alex Adelman! [Lolli CEO]”

Angela Tran Kingyens, a general partner at Version One Ventures, also echoes Friend’s sentiments.

“Lolli’s mission of making Bitcoin more accessible to everyone very much aligns with our primary core belief of democratising access to resources in general. We also think that Lolli is intuitive and easy-to-use as people’s first experience with Bitcoin. The idea of ‘earning’ Bitcoin while shopping is much more frictionless than buying currency for the average person.”

It seems that the key ingredient for the investors has to do with the way Lolli is looking to make Bitcoin accessible to those who are still unsure as to how one accumulates it.

“Lolli’s mission is to make Bitcoin more accessible to all, by simplifying the way people earn, share, and save Bitcoin. They democratise access to Bitcoin – perfect for people’s first experience with Bitcoin. They have over 500 plus top merchant partnerships already in place. You can earn Bitcoin while shopping for clothes, groceries, hotels, flights, and more. There’s no risk to the consumer, significantly improving the onramp into crypto,” Friend adds.

This different take on the acquisition of Bitcoin coming from Lolli, allowing people to be a part of the cryptocurrency realm by doing something that is very normal, shopping. These investors have identified what they believe is slowing the adoption of Bitcoin down, and are looking to address it through projects like Lolli.

The state of cryptocurrency investment.

While cryptocurrencies do have their own funding mechanism, in ICOs, these have mostly found to be wanting, and this has opened the door for traditional VCs to come in and pick up viable and promising projects.

Friend explains that at Bain Capital Ventures, their prerogative is about investing in founders, but it has also led them to the cryptocurrency space.

“Bain Capital Ventures focuses broadly on investing in visionary founders who are going after the biggest market opportunities and tackling massive problems. We believe crypto represents a multi-billion-dollar market whitespace and has significant potential to become a robust asset class if the right infrastructure and protocols are put in place. Hence, we’ve made a number of crypto investments aimed at strengthening the underlying asset class as a whole.” Friend said.

For Version One, the cryptocurrency investment game is not even that new for them, although they do see the entire space as still very much in its early days.

“At Version One, we were early to blockchain crypto with investments in Coinbase, Blockstack, Crypto Kitties, Citizen Hex, Celo, to name a few. We also invested in hedge funds such at Polychain and Metastable when they first launched,” Kingyens said.

Separating from the noise

The downfall of the ICO furore, as well as the cooling off of the Bitcoin market, is also being seen as a benefit to investors such as Friend and Kingyens.

The latter explains:

“We are in a crypto/blockchain bear market right now but this is ultimately good for us as we’ll see a separation of great companies and projects from the frenzy and noise we saw last year. As we think about where to invest, we stay disciplined around backing the best teams with strong native use cases.”

There is a lot of opportunities and potential left in the cryptocurrency and blockchain space though, according to these VCs, with Friend reminding that it is still early days.

“We believe it’s early innings and that crypto represents a multi-billion-dollar market whitespace and has significant potential to become a robust asset class if the right infrastructure and protocols are put in place,” Friend concluded.

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