ChangeTip raises $3.5 million in seed round
Social-media tipping platform ChangeTip announced today it has raised $3.5 million in a seed round led by Bitcoin investment firm Pantera Capital. With participants that include 500 Startups, Bold Start Ventures, CryptoCurrency Partners, and DCG, this latest round of funding will support product enhancement, platform engineering development, and user acquisition.
Dubbed a “love button for the Internet,” the San Francisco-based ChangeTip allows users to send money over dozens of different social networks and content showcase channels to reward content creators by way of an online comment or reply.
“The social media phenomenon of ‘tipping,’ or expressing one’s appreciation over the Internet with small monetary or other digital gifts, is building momentum,” said ChangeTip founder and CEO Nick Sullivan in a press release about the seed round. “With ChangeTip, a million users can tip $0.01 and the content creator can collect his $10,000 – an impossibility in a legacy payments world.”
When CoinReport spoke to Sullivan in August, he gave some reasons why he believes “now is the time for Bitcoin to be the enabler for all of the dreams we’ve had about micropayments.” Bitcoin, he said, offers low transaction fees and a level of anonymity; it is a currency neutralizer and highly divisible.
Connecting more than 50,000 social media or content showcase accounts, ChangeTip’s user base has grown 30 percent month-over-month since the service’s launch, according to the press release. High demand along with ease of use have fueled the service’s recent viral adoption and use on Reddit and Twitter.
A couple of weeks ago, my colleague, Andre Infante, reported on the service’s “awesome, wonderful, really great very good day.” On November 19, ChangeCoin, which operates ChangeTip, announced it reached a record of 10,000 user “tips” in a single day.
Infante referred to analysis of ChangeTip’s data by blogger and Dogecoin developer Jackson Palmer in his report. Nearly 85 percent of the tips were delivered on Reddit, with Twitter trailing distantly at nearly 12 percent. Of those tips, 79 percent were successfully collected, a statistic that Infante found most interesting.
“The tips being sent are not large (in some cases, vanishingly small). Bitcoin’s reputation is at least superficially sketchy,” wrote Infante. “It’s surprising and heartening that nearly 80% of people are willing to go through the signup process to collect a tip without feeling that they’re about to be taken for everything they’ve got – especially for sums of, on average, about a dollar. Changetip is a powerful tool for Bitcoin activism, and that statistic is an indication that it’s working.”
“Tipping is likely to be Bitcoin’s first killer app – seamlessly integrated into social media, enabling people to send money in a free, fun, instantaneous way without borders or minimums,” said Pantera Capital CEO Dan Morehead in the press release. “This could have a huge impact on Bitcoin adoption,” Morehead said, adding that “when we look back in a year’s time, there is a good chance that the majority will have received their first bitcoins free via ChangeTip.”
Speaking with CoinDesk, 500 Startups partner Sean Percival said his group decided to get involved due to Sullivan’s enthusiasm and support for digital currency and the long-term promise of ChangeTip itself. He said the funding round is just the first step in ChangeTip’s plans to deploy Bitcoin-powered payment solutions.
“Safe to say they are just getting started with today’s product offering,” said Percival to CoinDesk. “We’re very excited to be part of the journey and look forward to what’s next from the team.”
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