There are plenty of places to buy Bitcoin, so it’s not obvious why the world needs another one. But a startup called River Financial sees a niche: a Bitcoin service that operates like a conventional bank and caters to those over 55.
Launched last fall, River is the brainchild of Alex Leishman, a former aerospace engineer who became intrigued with Bitcoin in 2013, and was a teaching assistant for Stanford University’s first cryptocurrency class.
According to Leishman, well-known Bitcoin sellers like Coinbase and Grayscale cater to those with a trading mentality, and don’t provide the sort of customer service that investors—particularly older and wealthy ones—expect.
At River, he says, those looking to buy Bitcoin enjoy the sort of service they would get at a bank, including staff who return their phone calls. Leishman adds that River eschews exotic cryptocurrencies and trading options to focus instead on traditional banking products: joint accounts for married couples, IRAs, tax-advantaged accounts and so on.
River’s niche, which Leishman refers to tongue-in-cheek as “Bitcoin for Boomers,” appears to be gaining some traction. The startup has several thousand customers, many of them high-net-worth individuals, and claims it has been growing 80% every month since January—with 77% of that growth coming from those 55 or older. Leishman says many of these individuals want to acquire Bitcoin as a way to diversity from stocks and bonds, and because its supply is limited.
On Wednesday, River announced it had raised a $5.7 million seed funding round from crypto investment firms, including Polychain Capital, Slow Ventures, and Castle Island Ventures. The startup also announced the launch of its Private Client offering, which is tailored to family offices and high-net-worth individuals and enables clients to place Bitcoin orders of up to $250 million.
Leishman says River, which now has licenses to operate in 19 states, obtains its Bitcoin from a variety of sources and stores clients’ funds offline in a “2,000-pound military vault.” In the coming year, he says, River plans to offers standard checking and savings accounts in partnership with a chartered bank.
River’s advisers include two prominent individuals in the Bitcoin world, Elizabeth Stark of Lightning Labs and Steve Lee of Square Crypto.
Order fees top out at 1.5%, and the company doesn’t charge a fee to store customers’ Bitcoin. So far, says Leishman, his customers have been treating the service like a savings bank with deposits—in the form of Bitcoin purchases—accounting for 97% of transactions.
An earlier version of this story incorrectly described River Financial’s $5.7 million funding round as a Series A, not a seed round.
More must-read finance coverage from Coins2Day:
- 5 pieces of economic data investors are watching this week
- Why famed VC Bill Gurley thinks IPOs are such a rip-off
- Big investors like Bitcoin for the wrong reason
- The 8 cloud companies that crushed it in Q1
- Square’s head of lending thinks the PPP still needs more changes to help the smallest businesses