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Summary:

Obopay, a three-year-old mobile payments startup, has scored $20 million in additional funding, CEO Carol Realini told me this afternoon. She and other Obopay executives contributed to the round by wiring their investments to the company coffers by way of their Obopay accounts on their mobile […]

Obopay, a three-year-old mobile payments startup, has scored $20 million in additional funding, CEO Carol Realini told me this afternoon. She and other Obopay executives contributed to the round by wiring their investments to the company coffers by way of their Obopay accounts on their mobile phones.

Yes, it’s a gimmick, but it’s also a very real indication of Obopay’s determination. Much like Western Union is the money transfer agent of choice in the real world, and PayPal is online, Obopay wants to be the way to send money for mobile. To do this it will have to win out over PayPal’s own mobile division, plus a myriad of startups such as KushCash and TextPayMe.com. It has the backing. Prior to the most recent round, Obopay had raised $48 million. A company spokeswoman said the $20 million round isn’t complete and that the eventual total may be higher.


Obopay is counting on the experience of people like CFO Dave Johnson, a former CFO at PayPal and Banc of America Securities, because its global money transfer plans require it to handle banking relationships in multiple countries (right now it’s only in the U.S. and India).

It had to get a whopping 41 licenses in order to become a registered money transfer agent in the U.S. The result is that Obopay allows users to store and move money on their Obopay account accessed through mobiles or the web, and also to transfer money from their bank accounts using their phone to that of another person — even if that person doesn’t have Obopay.

The ability to transfer money regardless of a person’s carrier or bank is a compelling proposition. Realini hopes allowing non-Obopay members to receive money will help the company grow over the long term. The money transfer play here is much broader than the “split the check” kinds of social payments offered by KushCash and TextMyBill. The amount of money transfered between countries is in the billions, so if Obopay can expand quickly on an international scale, it could very well achieve what it’s trying to accomplish.

  1. “She and other Obopay executives contributed to the round
    by wiring their investments to the company coffers by way
    of their Obopay accounts on their mobile phones.

    Yes, it’s a gimmick, but it’s also a very real indication
    of Obopay’s determination.”

    Determination ? I think the right word is dilution of
    stocks!

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  2. Joe Tumminaro Thursday, April 17, 2008

    Ilove obopay

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  3. Feedback:

    Obopay after several rounds is not going anywhere. Their daily user count for the last month seems to less than 100 (yes one hundred, not thousand!). Let’s give them the benefit of doubt, say they have 1K daily users.

    $66M total for less than 1K daily users! For 100 users, you do the math! WOW!

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  4. Wow! I didn’t know Obopay. I love the idea. Shame is not in Europe yet. Would use them instantly.

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  5. Stacey Higginbotham Friday, April 18, 2008

    @feedback, that could be one reason Realini wouldn’t give any numbers regarding Obopay’s users or dollars transferred so far. It may also explain its willingness to open up the network so users can send money to non-users.

    However, money transfers are the big goal here, and the company just launched its money transfer program in India in March. I’d wait a bit and see if cross border transfers lead to more users.

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  6. The first comment is so right to the point.
    Welcome Dilution. A struggle to survive before the last nail on the coffin.

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  7. [...] send money through their mobile phones or over the web, has taken a $20 million round, according to GigaOm. While Obopay competes with PayPal, as well as some other, smaller startups, there’s [...]

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  8. 20 mn to send money from one mobile to anoter, raised 66 mn,been around for better part of a decade, and less than a few hundred transactions !

    Seems a bit far fetched. Where is this headed.

    To my mind smaller , but equally well known start ups, with 10 x transactions a day, but 1/10th of their fund raise – are in the market.

    So what does this say for valuation !

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  9. They have no idea of the money transfer business, they will go bankrupt faster than you think. Wait and see.

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  10. [...] The growing use of smartphones and shopping sites optimized for mobiles require payment options that are easier than keying in a 16-digit credit card number. Startups such as angel-backed Billing Revolution and Zong, which launched earlier this month after raising more than $12 million in venture capital, are tackling the problem of buying on your mobile phone. Zong sends purchase information to carriers, who then bill the subscriber for their purchases, and Billing Revolution offers a mobile credit card processing platform. In April, Obopay scored $20 million for its money-transfer-via-mobile efforts. [...]

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