U.S.-based venture capitalist Tim Draper has invested $1.25 million in OpenNode, a bitcoin-only payments processing startup.
Announcing the seed round on Tuesday, OpenNode told CoinDesk that the raised funds will be used to expand its team and beef up its legal and compliance efforts.
The firm claims to process “instant” and “risk-free” bitcoin payments for businesses, generating revenue by charging a 1 percent for transactions.
OpenNode taps the Lightning network – effectively a transacting layer on top of bitcoin – which is being developed in an effort to enable faster and cheaper transactions that can net-settle to the bitcoin blockchain.
OpenNode said in a statement that since the start of its platform, the capacity of the lightning network has grown over 15,000 percent to 456 bitcoin or BTC.
“We’ll continue to tackle new emerging markets where the lightning network can cut costs, promote creative payment models, and refine the current user experience with payments,” an OpenNode spokesperson told CoinDesk.
Draper, the founding partner of Draper Associates and Draper Fisher Jurvetson (DFJ) Venture Capital, is an early blockchain investor and has backed several startups in the space. Back in 2016, he led a $4.2 million series A funding round in Texas-based company Factom, aimed at building a number of new products for its blockchain data network.
Draper also participated in a total $760,000 investment round of bitcoin payroll startup Bitwage in 2015, and a smart contract trading platform called Mirror’s $8.8 million Series A financing in the same year.