Ripio, the bitcoin startup formerly known as Bitpagos, has officially closed its Series A funding round with a $428,000 investment from Overstock subsidiary Medici Ventures.

As revealed exclusively to CoinDesk, the Series A – led by China-based VC fund Huiyin Blockchain Venture – brought in a final total of $2.25m and is intended to fund the newly rebranded firm’s plans for international expansion.

Further, the Medici investment marks a change to Ripio’s original funding plans, which had been to close the Series A with smaller investors via the AngelVest platform.

In interview, Ripio senior vice president David Garcia said that, in addition to launching new features on its platform, his firm is seeking to expand to Mexico and Colombia in coming months.

Garcia said:

“We are looking to use the funds to keep the leading positions in the countries where we have operations and also grow our operations to new countries.”

The Argentina-based firm, which now employs 25 people, has already expanded into Brazil and aims to establish itself in the new markets as early as the end of this quarter. The startup – which provides bitcoin exchange, payments and credit services – now claims 70,000 users, an increase of 10,000 since January.

Money in the unbanked

Medici president and Overstock chairman Jonathan Johnson told CoinDesk that, when he heard of the opportunity to join the round, he was first attracted to the combination of the startup’s peer-to-merchant services and its advances in cross-border remittance services.

However, it was the firm’s location in Latin America that sealed the deal, he said.

An estimated 70% (about 400 million) of people in the region either do not have a bank account or are counted among the ‘underbanked’, meaning their access to financial services is not sufficient for basic requirements.

“In the payments space,” Johnson said, “it feels like blockchain is very well positioned for the unbanked, which the current technology and systems are not.”

The Ripio funding, he continued, represents a deeper expansion of Medici’s portfolio into the potentially valuable remittance use case, with the company already having invested in Peernova, Bitt, SettleMint, Factom and IdentityMind.

As part of the new investment, Johnson added, Medici is expected to take an “observer” seat on Ripio’s board of directors – a position he distinguished from more formal voting board members.

While the individual who takse up the role has yet to be determined, Johnson said “it’s likely to be a technologist” with the expertise to help Ripio make business-critical decisions.

Garcia commented:

“We will really take Medici Ventures as a strategic partner – not only for the funds, because of the experience they have at the whole company.”

Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Ripio.

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