1 Comment

Summary:

Revolution Money, an internet-payment company started by *AOL* co-founder Steve Case that also offers a credit card, has raised $42 million…

Revolution Money, an internet-payment company started by *AOL* co-founder Steve Case that also offers a credit card, has raised $42 million from Goldman Sachs, Citigroup and Morgan Stanley. The round follows a second round of $50 million raised in 2007 by Citigroup, Morgan Stanley, Deutsche Bank and a number of individuals, including Case (through his investment entity Revolution LLC).

Revolution Money competes with peer-to-peer payment providers like PayPal as well as credit-card companies, but lets users transfer payments to each other for free (PayPal charges) and charges merchants that accept its card smaller fees than competitors like Visa and MasterCard. The company said its card is accepted at over 650,000 merchants in the U.S.

Revolution is competing against entrenched credit-card companies and a well-established player in the online payment business in PayPal. But if it is able to carve out even a small niche with its service, the returns could be huge. Revolution recently struck a deal with Chase bank that allows its credit card to be used for internet purchases as well as at brick-and mortar retailers. Revolution’s Chairman Ted Leonsis said an IPO or sale isn’t on the table in the near-term, but could happen after 2011.

  1. rev bloggerusa Saturday, June 27, 2009

    Why would Goldman Sachs be allowed to use TARP funding to invest in a business (Revolution Money) that has not made any money since it started and burned over 50-80 million, had four or five offices, has gold plated its operation and location, asked employees to reduce salaries, closed NYC office after spending millions to open it, has sought to drive accounts and offer little in customer service, spend millions to drive new accounts that people did not know how to use because there were no changes to the web site.

    The company is bare bones and doesnt understand how to run an integrated online-direct operation.

    The company is a sink hole and is a failure. Now TARP money is propping it up – should be a congressional investigation!

    Share

Comments have been disabled for this post