The founder of DST Global and co-owner of Mail.ru Group, serial investor Yuri Milner is now placing his bet on Bitcoin and the startup company, Xapo. According to the founder and General Director of Xapo, Wences Casares, the Russian billionaire has invested an undisclosed amount of his own money into the Silicon Valley startup.

Xapo raises US$20 million

Besides the Russian VC, the startup received funds from Greylock Partners, Index Ventures and Emergence Capital. Other notable investors included Jerry Yang (cofounder of Yahoo!) and Max Levchin (cofounder of PayPal).

Back in March, Cointelegraph reported that Xapo secured US$20 million during its first round of funding. Now, the company receives another US$20 million cash injection doubling the total to 40 million raised. The latest investment values Xapo at approximately just over US$100 million, according to a person with knowledge of the matter. Wences Casares declined to comment on the valuation. However, he remarked on the latest funding round:

“In total, we have now raised US$40 million. We are very optimistic about what this represents, not only for Xapo, but also for the Bitcoin ecosystem as a whole.”

Xapo combines an online wallet with a cold-storage Vapo vault to make using and securing Bitcoins easier for users. Users can replenish their accounts through a simple bank transfer. The transferred sum will be automatically converted to Bitcoin based on the current price.

Russian Billionaire Bets on BTC

In recent years, Russia's Yuri Milner has become known as one of the biggest investors when it comes to Silicon Valley startups. Milner was one of the first major backers of Facebook in 2009 and has also invested in a few e-commerce startups like Groupon (IPO 2011), Zynga (IPO 2011), Spotify and Airbnb through his DST Global investment fund.

In 2011, Milner led a reported US$400 million funding round in Twitter with DST's stake comprising US$1.2 billion at the time of the company's IPO in November. Milner himself has also put money into several earlier-stage companies such as 23andMe, Genapsys and Coursera. Now Milner also has his sights set on China. Last year, Milner moved the DST head office to Hong Kong to be closer to his investments in e-commerce website Alibaba and mobile-phone maker Xiaomi.

Milner could certainly be called a VC poster child as he once again invested into an uncertain and relatively high-risk asset, according to Aleksander Konoplyastyi, managing partner of the Buran VC investment fund. As he puts it, Milner is one of the first people to bet on the Internet, which other investors tend to underestimate. And now the fact that Milner is showing so much faith in Bitcoin does not surprise Mr. Konoplyastyi at all.

Indeed, while a few years ago in an interview with Forbes Milner didn’t mention Bitcoin by name, he did hint at the notion in his strategy for 2014. Talking about late-stage companies that are worth looking at, he said:

“Companies that are scaling globally. So that’s Spotify, AirBNB, Xiaomi, […] We believe that in the next 10 years there will be 50 companies in the Internet space with a market cap of more than US$5 billion. And there will be 10 companies in that space in the top 100 global companies. The combined market cap of all these companies will be US$3 trillion, as opposed to US$1.5 trillion right now. So I think the whole market will double in terms of capitalization. There will be a big tide that will be raising many boats, some more than others.”

Milner certainly has a good track record of recognizing emerging Internet startups and supporting innovations from their inception to implementation to mainstream adoption. Interestingly enough, Xapo, which is based in Palo Alto and headquartered in Hong Kong, appears to fit the bill as a company that is scaling globally in an exciting and lucrative new industry. Therefore, given Minler’s steadfast preference for Internet companies, it would only make sense for Milner to not only get into the first true global currency but also the “currency of the Internet” i.e. Bitcoin.

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