When Michael and Dominic Vogel first pitched their idea for a virtual Bitcoin ATM on Dragons Den back in 2016, the average price of the crypto-currency was around $600 Cdn.
Today, even with recent tumult in the markets, the value has ballooned to more than $11,500, and the Port Coquitlam brothers are hoping to capitalize on the growth.
While the Dragons turned them down, their business, Netcoins, was recently acquired by a venture capital firm and is now trading on the Canadian Stock Exchange.
Michael Vogel told The Tri-City News the move marks a major milestone for the company, which already offers services at more than 3,000 vendors across the country.
“We were basically at the point where the company was growing far more rapidly than we could hold on for,” he said. “The public market was a good avenue for scaling up.”
As Bitcoin has become more popular and is accepted by more merchants, consumers often wonder how they can purchase the crypto-currency.
That’s where Netcoins comes in. Instead of a costly Bitcoin ATM, which can run $30,000 for retailers who then recoup the cost by charging expensive fees, Netcoins allows vendors to conduct their transactions over a device, like a tablet or laptop. When a purchase is made, Netcoins’ software creates a digital wallet for the customer, who is then sent their Bitcoins in real time.
“We don’t have to charge a lot of markup,” Vogel explained, noting that the fees for Netcoins transactions are half the cost of a typical Bitcoin ATM.
The retailer and Netcoins share the small convenience fee while the customer gets their Bitcoins from a trusted source at a face-to-face, bricks-and-mortar location, he said.
“A lot of people are looking for a trustworthy way to buy it,” Vogel said, adding that many of the online exchanges are located overseas and fraught with scams. “You just don’t know, especially if you are brand new to it.”
So far, the technology has been used by thousands of people, who have made millions in Bitcoin orders using Netcoins’ technology.
The idea for Netcoins grew out of the TriCelerate program, which operates the Innovation Hub at the Coquitlam Public Library and mentors young entrepreneurs in the Tri-Cities. Vogel said he believes his company is the first “seed-to-sold” technology company to come out of the initiative in the Tri-Cities.
While he can’t get into specifics about how much the venture capitalist firm paid for Netcoins — it is a combination of cash and stock in the new venture — Vogel said he will continue to be affiliated with the business. He currently holds the role of director and vice-president of technology, and said he is eager to participate as the company takes the next step in its development.
“I am still involved,” he said, later adding: “It feels like a real company, even though it started with humble beginnings.”
gmckenna@tricitynews.com @gmckennaTC
