A Chicago bitcoin ATM operator is expanding rapidly across the U.S. as it looks to make crypto buying and selling more accessible to the masses. And it's doing tens of million in revenue without any venture funding.
CoinFlip, founded in 2015, has become one of the dominant players in the cryptocurrency ATM space with around 2,500 machines spread out across 47 states. It did more than $50 million in revenue last year, CEO Ben Weiss said, growing to more than 200 employees.
Led by Weiss and co-founder Daniel Polotsky, two 26-year-olds who attended Deerfield High School together, CoinFlip is trying to make bitcoin available to anyone, including the unbanked and under-banked, Weiss said. It's different than Coinbase, for example, in that it operates mostly in cash rather than linking to your bank account. It's also faster to get onboarded for first time users, allowing people to purchase bitcoin in minutes, rather than the week or so it takes to create a Coinbase account, Weiss said.
Its other differentiator is customer service, Weiss said, with a team of in-house employees who answer phones and help users with their transactions.
"Coinbase is an $85 billion company, but you can’t even call anyone to get help getting your bitcoin," said Weiss, who added that the average customer support wait time is about 12 seconds. Last year the company handled 86,000 customer support calls, and it expects to do 200,000 this year.
The company's growth comes as bitcoin and other cryptocurrencies continue to become more mainstream. Bitcoin's value has fluctuated in 2021, falling from a high of $60,000 earlier this year to around $38,000 today, but Weiss said that hasn't slowed the company down. CoinFlip sold about $750 million worth of cryptocurrency last year, and in June of 2021 alone did about $135 million, Weiss said. CoinFlip takes a 6.9% cut of each bitcoin purchase. Its machines are located mainly in gas stations and convenience stores, who get paid by CoinFlip based on volume, along with the added benefit of increased foot traffic, Weiss said.
CoinFlip's only remaining states it hasn't launched in are New York, Rhode Island and Vermont, which Weiss said the company plans to enter shortly.
"We want a bitcoin ATM within five to 10 minutes of every single American house or their place of work," he said. "That’s why we’ve put ATMs all over the country—not just in the big cities. We’ve put them in Hawaii, North Dakota, South Dakota, Kansas. No area is too small for us."
There are about 24,000 bitcoin ATMs across the country, meaning CoinFlip operates about 11% of available machines in the U.S. It's the third-largest ATM operator in the country behind Bitcoin Depot and Coin Cloud.
CoinFlip is 100% bootstrapped, Weiss said. Investors have approached the startup, but Weiss has been hesitant to bring on outside funding, though he didn't rule it out down the road.
"Were open to it, but we want to find the right (investor)," he said. "We’ve heard the horror stories. A good investor can take a company to the next level. But the wrong one can really hurt a company."
