The Evolution of Coinme: From Bitcoin ATMs to Crypto at Coinstar Kiosks   - Coincu

Adaptability is key to the survival of any company. Neil Bergquist, CEO of Seattle-based crypto financial services provider Coinme, knows this principle well. In the past decade, the company has transformed from a provider of bitcoin ATMs to an API-driven crypto-to-cash service partnering with well-established providers like Coinme and MoneyGram.

In 2014, the company launched[1]  the first licensed bitcoin ATM in the U.S., one of the first 10 to be deployed globally. It’s since sustained an average annual growth rate of 164% over its decade of existence, and it now powers the largest network of cash-to-crypto machines in the world, with over 40,000 locations throughout the U.S.

“You have to love it,” said[2]  Bergquist in a recent interview when asked about launching a company in a nascent industry like crypto. “Starting a business or side hustle can be scary, exhausting, and risky, and it will consume whatever you can provide and more.”

Bootstrapping in the Early Days

The early days for the company were far from glamorous. Bergquist and his team faced numerous hurdles, from regulatory uncertainty to fundamental operational challenges.

“We had to do cash runs ourselves,” he explained. “We’d put on street clothes, visit the ATM late at night with a JanSport-type backpack, and stuff it full of cash from the cash acceptor. Then we’d wait anxiously for the bank to open, wait in line, and then, when it was our turn, we’d empty six figures of cash onto the counter.”

This hands-on approach was necessary because established cash logistics companies weren’t willing to work with such a small venture. It took over three years before Coinme could contract with professional cash handling services.

Financing was another constant challenge. “We maxed out credit cards, took out high-interest personal loans, negotiated payment plans with critical vendors, and did whatever we could to preserve cash,” Bergquist recalled.

He didn’t take a salary for the first three years, working nights and weekends on Coinme while maintaining a full-time job. At one point, Bergquist and his wife invested the proceeds from selling their home to keep the company afloat during a crypto market downturn.

Despite these challenges, the company persevered, driven by a belief in the potential of cryptocurrency to revolutionize finance.

“We help people by giving them access to what we believe is the future of money,” Bergquist said.

Pivoting to an API

The turning point for Coinme came in 2019[3] , when the company pivoted from operating its own ATMs to providing the software backend for exchanging crypto at existing kiosks. This shift began with a partnership with Coinstar, the ubiquitous coin-counting machines found in grocery stores across the U.S. Integrating Coinme’s software enabled these machines to offer bitcoin purchases alongside their traditional services.

This partnership marked a significant evolution in Coinme’s business model. Instead of the capital-intensive approach of deploying and maintaining its own hardware, Coinme could now rapidly scale by leveraging existing infrastructure. The company has since expanded this model, partnering with MoneyGram in 2021[4]  to enable crypto purchases at select MoneyGram locations.

The expansion hasn’t just been about geographic reach. Coinme has also broadened its offerings beyond bitcoin. It now supports seven[5]  additional cryptocurrencies, including ethereum, litecoin, and USD coin, a popular stablecoin pegged to the U.S. dollar.

In May 2024, the company announced[6]  it had surpassed $1 billion in retail sales, marking its 10th anniversary.

This growth hasn’t gone unnoticed. Coinme has been recognized[7]  as one of the fastest-growing companies in North America by Deloitte and The Financial Times. The company has also attracted significant investment, raising a total of $35 million from industry leaders such as Pantera Capital and Digital Currency Group.

Recent Developments

Coinme continues to broaden its footprint. The company recently added[8]  over 9,700 physical bitcoin ATM locations to the bitcoin.com site and map finder, enhancing visibility and accessibility for potential users.

It’s also taken steps to streamline its services. Coinme now offers automatic and near-instant fulfillment of crypto purchases at Coinme-enabled Coinstar kiosks. This feature allows users to exchange cash and have cryptocurrency loaded into their Coinme account within seconds, further reducing barriers to entry for newcomers to the crypto market.

In a move to expand its global reach, Coinme has partnered[9]  with CiNKO, a digital payments platform operating in 44 countries throughout Latin America and the Caribbean. This collaboration enables Coinme users to send funds to CiNKO[10]  wallets, which can then be cashed out at participating MoneyGram locations in these regions. The initiative aims to provide fast, safe, and reliable access to cryptocurrency for populations that may be underserved by traditional financial institutions.

Neil Bergquist, CEO of Coinme, emphasized the importance of this partnership to the company’s guiding principles.

“Our mission is to be a gateway to digital currency and a better financial future,” he said “This partnership serves that mission and the millions of people who benefit from trusted access to cryptocurrencies.”

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