Lemon, a mobile expense receipt tracker, got off to a solid start racking up 1 million users in its first four months. But the company isn’t just interested in helping people organize their receipts by taking pictures of them. It is looking at becoming a full mobile wallet for users, and it’s just raised $8 million to go after that goal. The Series A round was led by Maveron and Starbucks founder Howard Schultz’s fund, along with additional funding from Shutterfly, Drugstore.com, Zulily, Draper Fisher Jurvetson and The Social+Capital Partnership, the fund launched by former Facebook Vice President Chamath Palihapitiya.
The new money will help Lemon tackle what it calls its Smarter Wallet platform, which uses a broad definition of a mobile wallet. Oftentimes, we think of mobile wallets as just payment tools, but a wallet is really a place where we store a lot of cards, receipts, coupons and other items. Lemon’s Smarter Wallet will allow people to take a picture of all their payment cards, drivers license, loyalty and healthcare cards, as well as receipts, tickets and coupons. Initially, these will only be images that create a back-up wallet of sorts so users can’t really pay with their card or tap their phone to get loyalty points. The idea for now is to give people one place to hold on to all of the information they store in their wallet.
The app is secured with a 4-digit PIN, but also uses a 32-bit encrypted system to keep the stored data safe. Lemon applies the same optical character recognition technology it uses on receipts to understand the card information, so it knows how to organize the data. Ultimately, the goal is to make the wallet even more powerful by allowing users to track their spending on their various credit and debit cards, see their loyalty point balances or get alerts on their card expirations. And later, the different compartments in the wallet, such as spending and loyalty, will be be allowed to talk to each other, so potentially a user can get loyalty points based on their credit card spending without having to carry their loyalty card.
Even with its more modest initial steps, Lemon can still be helpful in the event a user loses their wallet. I can imagine using this just to enter in my credit card info on online commerce sites, when my wallet is in the other room. But ultimately, Wences Casares, Lemon’s co-founder, believes that a wallet such as Lemon will be a key application sitting on the home screen of everyone’s phone. He said the goal isn’t necessarily to handle check-outs, because paying by phone won’t be very convenient for years.
“We thing it’s more likely that users will want to go to one place but where everything is aggregated for them,” Cesares said.
Lemon, however, faces competition, most notably from Apple, which just announced a new iOS app called Passbook, which can store loyalty cards, concert tickets and airline boarding passes on a user’s mobile device. The app can work with a user’s lock screen and displays a barcode that can be used to complete payments or redeem awards.
As I wrote in February, Lemon is already evolving beyond its original roots to become more of a mobile Mint-like service. Users can now categorize, filter and total up spending, making Lemon more than just a repository for receipts. I think it makes sense for Lemon and Apple and others to aspire to build wallet apps. We have a lot of people concentrating on creating apps that make it easy for people to pay. But payment isn’t that broken right now and many next-gen mobile payment services will require a lot of work to become appealing to people compared to cards and cash. But I have a lot of cards, receipts and coupons in my wallet right now that make it much thicker than it has to be. Providing more ways to simplify that experience would be welcome for me and a lot of other consumers.