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Longevity can be a rare commodity for crypto companies, but Coinme, a Seattle-based exchange specializing in powering bitcoin ATMs, has not only survived, but thrived over the past decade. The enterprise has grown from a scrappy side project to a major player in the industry. In May, it announced it had surpassed $1 billion in retail sales, marking a significant milestone in its 10-year journey.
Coinme’s story is one of perseverance, regulatory navigation, and strategic pivots. It’s a trajectory that illuminates the broader narrative of cryptocurrency’s integration into mainstream finance, a process that has not always been smooth.
Coinme’s Origins
The company’s origins trace back to 2014, when CEO Neil Bergquist and his co-founder, Michael Smyers, were inspired by the concept of decentralized money. At the time, Bergquist was working as the managing director at Surf Incubator, a community space for digital entrepreneurs in Seattle.
“I knew the technology, specifically bitcoin and the concept of decentralized money, had great possibilities for the future,” Bergquist said in a recent interview. “My co-founder Michael Smyers and I believed we could place bitcoin ATMs around town, including at the incubator, and they would nearly run themselves.”
Bergquist says the idea, which began as a side hustle, was sparked after the launch of the world’s first bitcoin ATM in Vancouver, British Columbia, made headlines. Bergquist and Smyers took note that the machine processed over $1 million in transactions in its first few weeks, validating the demand for accessible crypto on-ramps.
However, turning this vision into reality proved far more challenging than anticipated. Unlike many tech startups of the era that operated under the “move fast and break things” ethos, Coinme was entering the highly regulated world of financial services.
“We wanted to operate a money services business in the U.S. If you ‘break things,’ you risk going to jail,” Bergquist explained. This reality led the founders to prioritize regulatory compliance from day one, a decision that would shape the company’s trajectory and differentiate it in a space often criticized for its Wild West approach.
Early Days
The early days were grueling. Bergquist and Smyers had to educate themselves on complex regulatory frameworks like the Bank Secrecy Act and the U.S. Patriot Act. They struggled to find a bank willing to work with a crypto company, facing rejection from hundreds of institutions before finally securing an account with a local credit union.
Even after clearing these hurdles and launching the first federally registered and state-licensed bitcoin ATM in the U.S., the challenges kept coming. There were machine malfunctions, requiring the founders to be on call around the clock. Cash management presented another significant obstacle.
“We had thousands, sometimes hundreds of thousands, of physical dollars in the ATM that needed to reach our bank account and, eventually, our bitcoin liquidity provider,” Bergquist recounted. Without access to professional cash logistics services, the founders resorted to late-night cash runs, stuffing backpacks full of bills and making nerve-wracking trips to the bank.
These early struggles underscore a crucial point about the crypto industry’s evolution: The unsexy, behind-the-scenes work of building compliant infrastructure has been just as important as the headline-grabbing price swings and technological breakthroughs.
Despite generating revenue from day one through transaction fees, Coinme operated at a loss for its first six years. The founders maxed out credit cards, took out high-interest personal loans, and even invested proceeds from the sale of Bergquist’s home to keep the company afloat during market downturns.
“At one point, my wife — who is also a business partner — and I took the proceeds from the sale of our primary residence in Seattle and put those funds into the company during one of bitcoin’s now-infamous downturns,” Bergquist shared. “Michael sold shares in another company he co-founded to help keep Coinme afloat.”
This period of bootstrapping and sacrifice illustrates an often-overlooked aspect of entrepreneurship in the crypto space. While media narratives often focus on overnight millionaires and billion-dollar initial coin offerings, many of the industry’s enduring companies were built through years of grinding and personal financial risk.
Growing the Business Through Partnerships
Coinme’s fortunes began to turn in the first quarter of 2017 when it secured a $1 million seed round. This investment came at a critical juncture, with the company’s bank account down to just $11. The influx of capital allowed Bergquist and Smyers to finally quit their day jobs and focus on Coinme full time.
A pivotal moment in Coinme’s evolution came when the company shifted from operating its own hardware to providing software solutions for existing kiosks and ATMs. This move from hardware to software enabled rapid scaling and set the stage for key partnerships that would define Coinme’s future.
Today, Coinme’s technology powers crypto transactions at over 40,000 physical locations across the United States, thanks to partnerships with companies like Coinstar and MoneyGram. This extensive network means that more than 90% of Americans live within roughly 5 miles of a Coinme-enabled location.
Accessibility has been foundational to Coinme’s growth strategy. Offering crypto through branded partners in familiar retail settings has allowed the company to solve what Bergquist calls “crypto’s trust problem.”
“Consumers can be wary of adopting new technologies, especially ones that seem like ‘magic internet money,'” Bergquist noted. “The days of meeting strangers in a coffee shop to swap cash for a USB stick with bitcoin are far behind.”
Coinme’s approach aligns with a broader trend in the crypto industry toward user-friendly interfaces and integration with existing financial infrastructure. As the sector matures, companies that can bridge the gap between the crypto economy and traditional finance are positioning themselves for long-term success.
But the company’s growth hasn’t been without setbacks. Like all crypto businesses, Coinme has had to weather multiple crypto winters — extended periods of depressed prices and waning public interest in digital assets. However, its focus on providing a reliable on-ramp to crypto, rather than speculative trading, has allowed it to maintain steady growth even during market downturns.
Over its 10-year history, Coinme has achieved an average annual revenue growth rate of 164%. This consistent growth in the face of market volatility speaks to the enduring demand for accessible crypto services, even as the hype cycle ebbs and flows.
What’s Next
Coinme has expanded beyond its initial focus on bitcoin. The company now offers eight additional cryptocurrencies, including ethereum, lumens, and litecoin. It’s also focusing on onboarding B2B partners with its crypto-as-a-service enterprise API, which allows financial institutions to integrate crypto offerings into their existing platforms. Coinme is the engine behind MoneyGram Online’s ability to offer the sale and purchase of crypto.
Coinme’s transition from a side hustle to a company handling billions in transactions offers several lessons for the crypto industry and beyond.
First, it speaks to the importance of regulatory compliance, even when it comes at the cost of rapid growth. In a sector often criticized for its lack of oversight, Coinme’s proactive approach to regulation has become a competitive advantage.
Second, Coinme’s story highlights the value of perseverance in an industry known for its volatility. While many crypto startups have flamed out after initial hype, Coinme’s steady growth over a decade demonstrates the benefits of a long-term perspective.
Finally, Coinme’s shift from a bitcoin ATM operator to a software provider powering thousands of locations illustrates the importance of adaptability. The company’s willingness to pivot its business model in response to market realities has been crucial to its success.
For Neil Bergquist, this work is about more than just business success. “We help people by giving them access to what we believe is the future of money,” he said. “Financial services are having a once-in-a-generation evolutionary moment, and it’s been exciting to learn about the challenges that will enable that vision to become a reality.”
