There are many places to buy Bitcoin, so it is not obvious why the world needs another. Since last fall the river has been the brainchild of Alex Leishman, a former aerospace engineer who intrigued with bitcoin in 2013 and was a teaching assistant at Stanford University’s first cryptocurrency class.
According to Leishman, well-known Bitcoin sellers such as Coinbase and Grayscale cater to those who are commercially minded and do not provide the kind of customer service investors, particularly the elderly and the wealthy, expect.
At River, he says, those looking to buy Bitcoin enjoy the kind of service they would get at a bank, including staff returning their phone calls.
River’s niche, which Leishman ironically refers to as “Bitcoin for the Boomers,” appears to be gaining some traction. The startup has several thousand clients, many of them high-net-worth individuals, and claims that it has been growing 80% each month since January, with 77% of that growth coming from those 55 and older. Leishman says that many of these people want to acquire Bitcoin as a diverse form of stocks and bonds, and because its supply is limited.
On Wednesday, River announced that it had raised a seed funding round of $ 5.7 million from cryptocurrency investment firms, including Polychain Capital, Slow Ventures, and Castle Island Ventures. The startup also announced the launch of its private client offering, which is designed for family offices and high-net-worth individuals and allows clients to place Bitcoin orders of up to $ 250 million.
Leishman says that River, which is now licensed to operate in 19 states, sources its Bitcoin from a variety of sources and stores client funds offline in a “2,000-pound military vault.
Order fees exceed 1.5% and the company does not charge a fee for storing Bitcoin from customers. So far, Leishman says, his clients have treated the service like a savings bank with deposits, in the form of Bitcoin purchases, accounting for 97% of transactions.
