Bitcoin startup Vaurum raises $4 million in seed funding

A venture capital group headed by tech investor Tim Draper and former AOL CEO Steve Case has raised $4 million in seed money for “white-label” exchange startup Vaurum. Based in California, Vaurum is one of many companies working to build high-volume bitcoin trading platforms that can be easily integrated into existing commodity and stock-trading systems. These systems are generally branded as unique trading systems for client companies, allowing major brokerages to offer their own bitcoin trading interfaces to customers.

According to a report on CoinDesk, Vaurum’s platform is already in use at early-adopting hedge funds, institutional investment companies and foreign exchange markets. Although no specific companies were named, given the nature of white-label exchanges it’s not unlikely that any high-volume, mainstream brokerage currently working with bitcoin could be using Vaurum’s software.

The cash infusion should allow Vaurum to stand toe-to-toe with similar projects, such as the Y Combinator/Google Ventures-backed Buttercoin platform, Singapore-based itBit and New York City-based Coinsetter, all of which have received significant funding support in recent months. The investment round also includes significant contributions from VC firms Battery Ventures, Crosslink Capital and RRE Ventures. Vaurum secured around $150,000 last year in a very early round of funding following the Boost VC incubator program.

The investment marks the first time Battery Ventures has backed a bitcoin startup. Working with a $900 million pool of capital, should the Vaurum investment pay off the VC firm could become a major force in future bitcoin company funding.