EcommerceBytes-NewsFlash, Number 2739 - February 14, 2012     3 of 5

VCs Fund Online Payment Startups Stripe, Dwolla

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Venture capitalists apparently believe there is more room for innovation in the online payments space beyond services like PayPal and Google Wallet, with reports of new funding rounds going to startups Stripe and Dwolla.

Sequoia Capital and other investors reportedly funded Stripe, valuing the company at $100 million, according to Bloomberg (and seemingly confirmed in a tweet by cofounder Patrick Collison). Stripe allows developers to easily accept credit card payments for 2.9% plus 30 cents per successful charge - "No setup fees, no monthly fees, no card storage fees, no hidden costs: you only get charged when you earn money."

The company was founded by Irish entrepreneurs who founded an eBay listing tool called Auctomatic, which they sold in 2008. Fast Company ran a profile of Stripe last month, reporting that the company is backed by Sequoia Capital, Andreessen Horowitz and PayPal cofounders Peter Thiel and Elon Musk.

Also making news was Union Square Ventures' lead in a $5 million funding round in Dwolla, which said it would use the funds to aggressively scale its operations this year, specifically to bolster product development and support for the payment option and aggressively expand its API offerings. Village Ventures, Thrive Capital, Artists and Instigators and Paige Craig of Betterworks participated in the funding round.

At 25 cents per transaction for amounts over $10 (transactions under $10 are free), Dwolla is the nation's lowest-cost payment option, and it has attracted 80,000 registered accounts and 7,500 merchant accounts.


About the author:

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.


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