Blockchain technology is making its way into public government.
Bellevue, Wash.-based DigitalTown today announced a $2.4 million investment from Pithia, a new venture capital firm in Seattle focused on funding blockchain startups.
DigitalTown originally launched in 2005, went public in 2007, and re-launched in 2016. It works with more than 22,000 cities and municipalities across the world, offering online storefronts to local businesses that uses blockchain technology to let consumers make digital purchases without fees.
DigitalTown makes money by selling a license of the platform to a city; it also earns revenue via commissions paid by the businesses to transact on the platform. It’s built to be a local alternative to giants like Google, Expedia, or Airbnb. The 34-person company has customers in Austin, San Antonio, Dallas, Miami, London, Nashville, and others.
Rob Monster, a veteran entrepreneur who was previously CEO of domain business Epik and founded Global Market Insite (acquired in 2011 by Kantar), is CEO of DigitalTown. In a statement, he said the new funding will help DigitalTown’s vision of “thriving, sovereign and connected communities, both online and offline.”
In December, when DigitalTown announced a blockchain-based token called CityShares, Monster explained more about DigitalTown’s vision:
“AirBnB and Uber have shown the world the power of the Sharing Economy to tap the productive capacity of individual citizens in a community. Blockchain, and in particular Bitcoin, has shown the world the power of distributed ledgers as alternative stores of value and as an efficient medium of exchange. With DigitalTown, we aim to bring these proven digital success models to cities, towns and communities of all sizes, empowering them to become sovereign economies where the digital platform serves the people, and is owned either by the people or for the people.”
Pithia CEO Lawrence Lerner will join the DigitalTown board of directors as a result of the funding. Pithia, a venture capital arm of The RChain Cooperative, earlier this month invested in another Seattle-area blockchain startup, Trusted Key.
“The investment in DigitalTown brings foundational services via blockchain to consumers in everyday businesses such as restaurant, hotels and other services,” Lerner said in a statement. “It is one more of the layers of infrastructure services bringing us another step closer to impactful, real world use cases for performant blockchains. Pithia is thoughtfully building the underpinnings of the blockchain era, and nothing is more foundational than the cities we live in and how we interact with one another.”
RChain Cooperative recently launched a separate blockchain venture fund based in Seattle with investment group Reflective Venture Partners.