Jack Dorsey leads $6M seed round in bitcoin startup Azteco
Azteco, a crypto business aiming to make it easier to buy bitcoin, raised $6 million in seed funding led by Block CEO Jack Dorsey.
Why it matters: The deal values the company at $84 million pre-money — a significant cut above the $13 million that the median seed-stage startup hit in the first quarter of the year, per Pitchbook data.
How it works: Officially formed in 2020, Santa Monica, California-based Azteco focuses on unbanked or underbanked populations in emerging markets.
- It sells bitcoin vouchers that can be redeemed in physical stores — therefore allowing consumers in heavily cash-based communities to access the asset. The company takes a cut of each transaction.
- It also aims to provide an easier way to buy bitcoin online, requiring no account creation or a full know-your-customer process.
- When asked whether that could allow for fraud, co-founder Paul Ferguson likened it to gift cards, adding that all of the company's transactions are below $1,000.
- He pointed to guidance from the Financial Action Task Force that says virtual asset service providers must conduct customer due diligence above the $1,000 threshold.
Yes, but: Azteco does require that the end user has a crypto wallet, which may have its own KYC process.
Context: The company's focus lines up with Dorsey's own views and planned path for his payments business, Block.
- Dubbed a bitcoin evangelist, Dorsey has said he is the more bullish on the asset compared to other cryptocurrencies, and believes it has value as a way to transfer value.
- "Bitcoin with its finite supply cannot be inflated away," says Ferguson on why he the company chose the asset rather than a less volatile stablecoin. With bitcoin "people will be in control of their own money. With a stablecoin, there's always some central entity that controls [it.]"