Xapo, a bitcoin wallet and cold-storage vault start-up established by former Lemon founder Wences Casares, has raised $20 million in Series A funding led by Benchmark, with Fortress Investment Group and Ribbit Capital.
Aiming to become the Fort Knox of the Bitcoin world, Xapo keeps bitcoin accounts in total lockdown using multiple layers of proprietary security protocols backed by insurance against losses from Meridien Insurance.
Accounts are stored in a computer that has no Internet access, with encrypted data back-ups segregated onto external drives and paper and secreted in physical vaults in geographically dispersed locations.
"Think of it like a safe deposit box at your bank," says Casares, who was part of the team behind the Lemon digital wallet platform, which was sold to LifeLock for $43 million late last year.
Casares is billing Xapo as a one-stop-shop for bitcoin users, combing a free wallet and vault security service. Storage in Xapo's Vault costs an annual fee of 0.12% for each deposit made.
"When I first learned of Bitcoin, I immediately saw the promise and utility of the currency and platform," says Casares. "I grew up in Argentina, where at times the economy experienced 12,000% annual inflation. I believe that a digital currency like bitcoin could solve the disjointed nature of our world economy."