Coinbase was once described by investor Fred Wilson as being “like JPMorgan or Goldman Sachs for blockchain.” Now, the U.S.’s largest cryptocurrency exchange is itself set to become an investor in other companies that develop products and services for the virtual coin sector.
The company on Thursday announced the formation of Coinbase Ventures, through which it will finance “early stage companies that have the teams and ideas that can move the space forward in a positive, meaningful way.”
“At least in the beginning, our goal is simply to help the most compelling companies in the space to flourish. This means that we don’t have the strategic requirement of formalizing partner relationships with such companies, as some corporate venture programs do. Our focus is on building strong relationships and helping to spur on the development of the ecosystem,” business development chief Emilie Choi wrote in a blog post.
Choi noted that Coinbase might even invest in companies that appear to be its competitors. In some cases, she said, this might be because “there might be nuance to the way these startups are building out its products.” In others, “we may be comfortable investing in companies that are potentially competitive, because it’s in everyone’s interest to see the ecosystem innovate.”
According to Business Insider, Coinbase Ventures will for now refrain from investing in security tokens. This is one type of token issued in so-called initial coin offerings (ICOs).
Coinbase is rapidly expanding into a financial services giant within the cryptocurrency market. Last month it introduced a new cryptocurrency index fund, allowing people to invest in virtual coins such as Bitcoin through the fund, rather than buying them directly.