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Jack Dorsey leads $6M seed round in bitcoin startup Azteco

May 18, 2023
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Illustration: Victoria Ellis/Axios

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.]"

Of note: Dorsey has made a number of personal investments — including in crypto startup CoinList (last valued at $1.5 billion) and Lightening Labs — but is not known to lead rounds.

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