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For a startup that’s supposed to be in stealth mode, Clinkle is drawing an awful lot of attention. Its 22-year-old CEO and founder Lucas Duplan has already been profiled in the Wall Street Journal, and his fledgling mobile payments company has already become a big draw for Stanford University’s best and brightest computer scientists.
But if anyone in Silicon Valley hasn’t heard of Duplan yet, they certainly will know of him soon. Clinkle just closed a mammoth $25 million seed round – that’s right, I said seed round – from some of the Valley’s biggest heavyweights including VCs Accel Partners and Andreessen Horowitz and strategic investors Intel(s intc) and Intuit(s intu).
Clinkle’s list of individual angels is just as impressive: PayPal(s ebay) co-founder Peter Thiel, Qualcomm co-founder Andrew Viterbi, VMWare co-founders Diane Greene and Mendel Rosenblum, Venrock Associates founding partner Peter Crisp, Salesforce(s crm) founder and CEO Mark Benioff and many more. Everyone from Duplan’s Stanford computer science professors to a former U.S. Ambassadors are investing in his startup.
The problem with mobile wallets
So what does Clinkle do exactly? Duplan is still being secretive about the details, but in an interview with GigaOM he laid out the basic framework of Clinkle’s plans. The company wants to overcome the inertia preventing people from using their mobile phones as wallets, and it plans to do so through a combination of technology and market strategy.
Clinkle is an app-to-app payment platform that requires no special hardware on the phone, nor at the point of sale. In order to start using Clinkle, both consumers and merchants simply download an app, Duplan said. As for strategy, Clinkle is going where the money’s not: college students. It’s been running a pilot at Stanford for the last two years, but when the startup officially launches its app, it plans to target campuses around the country, Duplan said. You can actually download Clinkle from the iTunes(s aapl) and Google Play(s goog) stores today, but when you open the app you’ll only be asked to join a waiting list.
According to Duplan, the setup is designed to solve what he sees as the three biggest problems facing mobile wallet solutions. The first is logistical: the burden is on merchants to buy the necessary hardware or update their point-of-sales systems so they can accept mobile payments. By dealing entirely in software, businesses can start accepting Clinkle payments in minutes, Duplan said.
The second problem is that of network reach. If you try to launch a new mobile payments system in a big city like San Francisco or New York, you’re almost doomed to fail, Duplan said. Ask 100 people in Chicago the primary place they would want to use their mobile wallet, and you’ll get 100 different answers.
“Instead of trying to boil the ocean, we decided to start with college campuses,” Duplan said.
Colleges are fairly insular places. If you ask students which businesses they frequent, you’ll get a lot of the same answers, Duplan said. Just by bringing the businesses in the student union online, you’ve already captured a sizable part of campus commerce. Starting with the school as a nucleus, Duplan said, Clinkle will expand outwards, targeting the businesses that surround a university and cater to students. As students graduate and leave, they’ll take the app with them acting as evangelists for Clinkle in the wider world.
If this is starting to sound like another famous startup founding story, then it’s no coincidence. Duplan said part of Mark Zuckerberg’s genius was building up Facebook(s fb) within the confines of Harvard before unleashing it upon the world. (There are other parallels to the Facebook founding mythology: Duplan started Clinkle when he was 19 at Stanford, but instead of dropping out of school to focus in his company he just graduated a year early.)
As for the third problem, Duplan said that the mobile payments options out there simply aren’t compelling. Clinkle’s goal is to create the digital transaction equivalent of email – a solution that makes you wonder why you ever dealt with paper, or in this case, cash or plastic, in the first place. Whether Clinkle can meet such a lofty goal remains to be seen. There certainly is no lack of innovative companies trying to tackle the some problem with little luck. But the again, there are a lot of Silicon Valley investors collectively betting $25 million that Duplan can.