Coinstar Plans Massive Expansion of Coinme Bitcoin ATMs as Usage Spikes 40%

Coinstar, the coin counting kiosk maker hosting 3,500 Coinme bitcoin ATMs, is looking to double its bitcoin-capable supermarket locations.

The doubling would happen “within a year,” President of Product Michael Jack told CoinDesk. He said Coinme bitcoin ATM growth “both on a per location and overall basis, has been very strong.” The company already has plans to roll out new machines, though he did not specify how soon this would happen.

The deliberations come as Coinme lays claim to a veritable accomplishment of the COVID-19 era: It’s bringing in new customers, even while other businesses flounder. Coinme spokesman Nick Olsson told CoinDesk that forty percent of transactions since late February are from first-timers.

One reason for the surge may be the placement of Coinme bitcoin ATMs almost exclusively in supermarkets and pharmacies, just about the only brick-and-mortar establishments that remained open to consumer foot traffic through COVID-19 lockdowns.

That twist of fate let Coinme “provide uninterrupted access” to customers, Olsson said.

As panicking shoppers flocked to grocery stores in mid-March on lockdown supply runs, some were apparently also bulking up on crypto: Bitcoin transaction volume at Coinme kiosks is up 40% since late February. 

Coinme also saw a “slight uptick” in $1,200 transactions – the same dollar amount as coronavirus stimulus checks sent to Americans by the Treasury Dept. – “although we’re not seeing a strong correlation,” Olsson said.

“The recent increase in sales certainly helped remove any concerns around company performance and durability during the pandemic,” Olsson said.

Cash injection

The news immediately follows Coinme’s Thursday announcement that it had raised $10 million in Series A funding from Coinstar, Blockchain.com Ventures, Hard Yaka, Nima Capital and Pantera Capital, who led the ongoing round with $5.5 million. Pantera now controls a board seat with Coinme.

Even before the spike, Pantera partner Paul Veradittakit said his VC firm likes Coinme’s boots on the ground business model. He said it appeals to consumers curious about bitcoin and who are certainly familiar with the concept of ATMs but perhaps not ready to open an account with an online exchange.

“People aren’t there yet in terms of education, people aren’t there in terms of technology,” he said. “This is the way to get the mainstream user, the general public, the folks that are going to grocery stores” to buy bitcoin.

Olsson said Coinme would use the cash to expand its business in Latin America. Because it builds an exchange API rather than an actual machines, Coinme can plug bitcoin buying into just about any compatible device: “kiosks, ATMs, [Point of Sale], and merchants” in Latin American countries, Olsson said.

“They want to be the backend, they want to be the pipes to make money move around the world in a much more seamless way,” said Veradittakit.