In what has to be one of the more interesting pieces of fundraising news in the world of Bitcoin this year, OpenBazaar closed a seed round of funding. In total it was reported that they raised $1m from Union Square Ventures, Andreessen Horowitz, and angel investor William Mougayar.
According to OpenBazaar’s blog, the funds will be used to “…develop the OpenBazaar protocol and client, and build the first business on top of the OpenBazaar network.”
For those who haven’t heard of OpenBazaar, it’s “… an open source project to create a decentralized network for peer to peer commerce online—using Bitcoin—that has no fees and cannot be censored. Put simply, it’s the baby of eBay and BitTorrent”.
What makes this funding announcement so interesting is the controversy surrounding the OpenBazaar project. This has mainly been due to its P2P nature which some have said is reminiscent of Silk Road. Given this, many were caught by surprise by the blue chip VC participation in the round (I’ve included below a great article penned by USV on why they invested in the round).
Although, it’s a controversial investment I think it does signal a really bold move by the investors who participated in the round. In many ways this is simply one step further down the line of the ‘unbundling’ markets thesis that both USV and A16Z so strongly advocate (and back).
Interestingly, this may turn out to be a very inspired investment. If the platform continues to grow and develop (as it has since inception as a fork of a Bitcoin hackathon project) OpenBazaar may prove to be Ebay 2.0 – at even bigger scale.