FORT COLLINS — Radar Relay, a startup that lets cryptocurrency users securely post and exchange their money online, has closed its seed round of $3 million.
Radar Relay, started by former Innosphere employee Alan Curtis, uses blockchain — the database storage technology that has made cryptocurrency such as Bitcoin possible — to create a better platform for exchanging cryptocurrency.
Just like there are centralized online foreign currency exchanges, a crop of exchanges for digital currency has appeared.
Much like banks, these exchanges — such as the San Francisco-headquartered, 200-person Coinbase, recently accused of insider trading — are centralized and require information from customers such as Social Security numbers, passwords, and account login information.
“They operate similar to a bank, and because of that, there can be insider trading, hacks. There are over 150 different centralized cryptocurrency exchanges, and every week there’s another hack with hundreds of millions of dollars lost,” Curtis said.
Curtis, CEO of Radar Relay, decided to start a platform that would have the same level of functionality as an exchange but would do it in a way where his company would not be in charge of or handle user funds.
What he created was Radar Relay, which operates like an exchange but is technically not. Its software is what is called a relayer.
“We don’t have passwords, accounts, we don’t exchange or hold user funds,” he said. “We act as a bulletin board. You share your order intent, that’s cryptographically stored and posted on our bulletin board and someone who wants to can fill that order. It’s a fancy bulletin board.”
By operating in a simpler manner than an exchange, Curtis said his company has created software that is more secure.
But the way Radar Relay was able to get the security they needed to work came from a technology that was not available until recently.
The startup’s platform is built on a protocol called 0x, which was launched in July by a startup team called 0x. The protocol they developed was the technology needed to cryptographically encode messages and is now the backend for how Radar Relay posts the orders placed and filled by its customers.
Curtis said that 0x is secure: the protocol has been audited by multiple third-party firms.
What is more, there’s nothing to hack. Radar Relay’s software holds no files, storage or passwords.
“Our core piece is around security,” he said. “We’re private and secured.”
The $3 million the startup has raised will go to expanding the platform globally, building an integration team that can connect Radar Relay to other trading platforms (much like how PayPal is connected to many e-commerce sites) and to acquiring more talent.
The seed fund was lead by Blockchain Capital. Other investors included Batshit Crazy Ventures, Collaborative Fund, Digital Currency Group, Kindred Ventures, Kokopelli Capital, Notation Capital, Reciprocal Ventures, Sparkland Capital, V1.VC and angel investors.
So far, the startup is made of 15 people, mostly in Northern Colorado.
“My background was at Innosphere for three years, working at an economic-development incubator focused on job creation and finding talent,” Curtis said. “It’s been fortunate for me in Colorado, having those relationships and resources, to find talent. What has been challenging is communicating that to investors that don’t believe we can build a credible company here.”
But with 15 top-tier employees, Curtis said he has built a successful company here and plans to continue to do so.
“We plan on tapping into Boulder and Denver for engineers and designers, but Northern Colorado is going to be the base of our operations. We’ll have satellite offices in New York, San Francisco, but we’re trying our hardest to keep the company and the economic development in this town.”