Today, we’re pleased to announce that Real Ventures has invested in Blockstream, the new startup being founded by Austin Hill, Adam Back and an amazing team of co-founders. Blockstream is focused on extending the core technology underlying Bitcoin to accelerate innovation in crypto currencies, open assets and smart contracts. The seed round was $21M and led by Reid Hoffman, Khosla Ventures and our firm with participation from a number of well-regarded luminaries in the Internet and finance sector.
I first met Austin in 2001 while he was at Zero-Knowledge Systems, the company where he and Adam first worked together attempting to commercialize privacy enhancing technologies. We worked together for the first time in 2007 when he joined us as a venture partner as we were launching our first fund. He remains a close advisor and collaborator to our firm to this day. We also backed Austin in his last startup that focused on gift economies.
When Austin told us early this year that he was back in business with Adam to pursue the idea of the Blockstream, we were excited to hear the story. They explained how they’d devised a way to improve the flexibility and power of Bitcoin with a technology they called “pegged sidechains”, blockchains that are interoperable with each other and with Bitcoin.
Their work could “extend the capabilities of Bitcoin and blockchain technology to a myriad of asset types” and “allow any number of so far unthought developments to happen in an open and interoperable way.” Sidechains could help Bitcoin become the world’s dominant trustless digital trading platform, disrupting existing forms of trade and enabling fundamentally new ones to emerge. We were fascinated by this idea and we immediately decided to invest – with the ultimate goal of finding the right partners for this seed round.
We’ve known Austin for a while, and frankly, we’ve never seen him this excited and passionate about something before. It’s like his entire life’s work was meant to prepare him for this Blockstream journey. Adam shares this focus and passion, and impressed us with his capabilities and intentions. I’ve had the opportunity to spend time with their team over the past six months and I am convinced in their ability to have a significant, positive social impact. As Austin put it, they have the vision, team and investors to deliver on the “Can’t be evil” mantra.
At Real Ventures, we pride ourselves on supporting passionate entrepreneurs trying to change the world and the communities in which they thrive. Opportunities like Blockstream are rare in that they have the potential to fundamentally and positively impact our global society. As such they must be treated differently. As our co-investor Reid Hoffman so eloquently points out, Blockstream is first and foremost about improving Bitcoin “in a way that keeps Bitcoin open, accessible to all users and developers, a public good.” Like Reid, we are firm believers that investing in the success of the Bitcoin ecosystem first will not only benefit all of its participants but is a must for its long term success. We are excited to be working with Reid and Vinod Khosla, who both have a history of supporting projects that have a positive social impact, as well as the rest of the investor syndicate.
We are very happy that Blockstream gave us the opportunity to participate in this journey and we look forward to becoming an even more active investor in the new ecosystem of companies, products and services that Blockstream will enable.
As always, if you’re working on exciting technology that has the potential to change the world, or if you just want to continue the conversation on Bitcoin, please feel free to reach out.