Bitcoin API Startup Gem Raises Funding Total to $3.3 Million

Californian bitcoin API developer Gem has announced an additional $1.3m in funding, raising its total to $3.3m.

The round was led by KEC Ventureshttp://www.kecventures.com/portfolio/, with additional contributions from First Round Capital, RRE Ventures – also an investor in 21 Inc and Abra – and early Facebook investor Robert Wolfson, among others.

Gem closed its previous round in September last year after receiving funds from Mesa Ventures, Idealab, James Joaquin and Brock Pierce's investment firm, Crypto Currency Partners.

A spokesperson for the platform said the newly acquired funds would be used to accelerate feature development and scale Gem's services for developers worldwide.

Multi-sig wallet

Gem's funding coincides with the launch of its multi-signature wallet API, which is now publicly available following a series of improvements.

Approximately 40% of people using Gem's API are from outside the United States – dispersed throughout Europe, Asia and South America. The new API aims to ease integration for this worldwide user base, while providing added security measures to protect bitcoin wallets and keys.

Ken Miller, COO at Gem, said the security improvements had taken "massive amounts of time and energy to bring to the market". However, he added:

"It just was not an area we were willing to compromise."

The system now uses Hardware Security Modules (HSMs), physical computing devices that safeguard and manage digital keys for strong authentication and provide crypto-processing.

By implementing FIPS-140-2-Level 3 certified machines, Gem claims that unauthorised access attempts will prompt the device in question to self-destruct.

Competition

"Getting access to all of that in a few lines of code from our API is pretty differentiating in our opinion," said Miller.

The COO commented on what, he believed, set Gem apart from other API providers, which are seeing growing interest from investors:

"There are some who do parts of what we've built, but for anyone [...] to be able to offer bitcoin capabilities like this in minutes is pretty unheard of at this point."

Gem faces competition from a growing number of bitcoin APIs in California, including the Boost VC-backed BlockCypher and Chain, which has raised a total of $13.7m from investors including Khosla Ventures and Barry Silbert.

In September last year, one of the best-funded startups in bitcoin, Coinbase, released Toshi, a free API toolkit for bitcoin app developers. This week it published a wishlist for 10 types of companies it would like to see built by developers using its API.