San Francisco-based Boku has raised a sizable round of funding totaling $25 million to build a mobile-payments company that they believe can one day compete against financial institutions, like Mastercard, Visa, and even online providers, like Paypal.
The year-old company has partnered with wireless carriers around the world to let people use their cellphones to pay for online virtual goods from social networks, like Facebook and MySpace. Once a user enters their cellphone number, and verifies the charge via text message, the amount appears on a user’s next bill. Even just a week ago, the idea may have sounded less probable, but since then the Red Cross has collected $22 million for its Haiti relief efforts via text messaging, signaling that consumers are ready to start spending by mobile phone.
Investors in the third round include: DAG Ventures, Benchmark Capital, Index Ventures and Khosla Ventures. In total, the company has raised $38 million. In an interview with mocoNews, Ron Hirson, BOKU’s SVP of product and marketing said the money will go towards global expansion: “Right now with 196 carriers, we reach 1.8 billion potential subscribers, but there are 4 billion people worldwide that have cellphones.” Hirson added that more subscribers make them more appealing to more merchants. In doing that, a lot of money will be spent on adding redundancies and technology to their system similar to a bank’s. “We aren