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Cryptocurrency Exchange Startup ShapeShift Raises $10.4 million in Series A Funding

ShapeShift, the digital currency exchange, has successfully raised $10.4 million in Series A funding, in a funding round that will help the startup move toward the launch of its exchange products later in the year.

Fronted by Berlin’s Earlybird Venture Capital, the funding round drew on support from existing partners like FundersClub, founder Erik Voorhees and Digital Currency Group.

Additionally, new investment was secured from the likes of Pantera Capital, Lakestar, Blockchain Capital and Access Venture Partners.

The funding will help ShapeShift expand its engineering capacity, as the company doubles down on product ahead of a scheduled rollout later in 2017.

ShapeShift has experienced average growth in its user base at 48 percent a month over the last three years, with some 50,000 bitcoins already transacted through the platform.

The company is developing two separate exchange products for the digital currency space, as it continues to grow its footprint in the market.

As the company anticipates both further growth in their existing user base, as well as the two new products coming on stream, it is expected that much of the funding will be used to strengthen their technical firepower.

Their latest products, which remain largely under wraps, are said to in part focus on providing an exchange for smart contracts.

According to founder and investor Erik Voorhees, the exchange is eyeing opportunities in a wide diversity of markets and use cases, as they strive to create frictionless exchange for cryptocurrencies and blockchain tokens more broadly.

"What we saw when we started was that tokens were going to become a widespread phenomenon. We believed there would be blockchain tokens representing all sorts of value beyond currency, and that's become increasingly true, which is why ShapeShift's frictionless exchange is important."

The funding comes at a promising time for cryptocurrencies, with investor interest in alternative currencies creating something of a boom for cryptocurrency markets.

Reliant on blockchain technology to generate and record token exchange on the distributed ledger, some analysts have described alternative cryptocurrencies as an emergent asset class in their own right, which could soon see more mainstream investors pulled into the market.

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