Like a prospector during the oil boom or a 49er during the gold rush, in 2013, Peter Kirby was working to make his fortune by building hardware that mined for bitcoins, a form of cryptocurrency based on blockchain technology.
Today Austin-based company Factom, led by Kirby, announced they've sold a piece of their claim in a $4.2 million series A funding led by Tim Draper and Draper Associates. This comes atop a $1.9M raise in 2015.
Draper is a well-known Bay-area investor who made early bets on Netscape, Hotmail and Skype. The fundraising also includes a real estate tech company from Houston and Chinese investors.
Though he no longer mines for bitcoins professionally, Kirby is still very involved in blockchain technology. Factom, co-founded in 2014 by Paul Snow and David Johnston, is a "blockchain as a service" company that deploys blockchain security layers into existing technology. Snow and Johnson serve as chief architect and chairman, respectively.
Factom's origin emerged from an "ah-ha!" moment when Snow thought about using blockchain as a way to secure data. Factom is a cousin to Ethereum and other efforts to improve on Bitcoin and apply cryptocurrency principles to new kinds of transactions.
Factom has built their business by taking the blockchain technology used in securing bitcoin transactions and applying it to data security. Their first customer was the Department of Homeland Security, adding blockchain technology to security and border protection sensors and devices.
"We really believe that one can take this blockchain technology and give a bunch of systems in the world -- whether they're banking systems, insurance systems, government systems -- and build more honesty and transparency into them," said Kirby.
The company had quickly moved into international markets as well. In May 2015, Factom approached a deal with the Honduras government to use Factom blockchain technology in preventing land title fraud, though the deal has since stalled. The intent was to use Factom technology alongside Austin-based Epigraph land title software to build an immutable title record devoid of fraud.
Some of their early international customers included a digital notary and a DocuSign-like service, both based in China, and the early traction brought on the attention of Chinese investors.
"The blockchain message fits very nicely into that culture," said Kirby. "We've got customers in the U.S. We've got customers in China. We've got customers in Europe -- we're sort of a global organization."
