Obopay scores $70M from Nokia for mobile payments
Obopay, provider of a mobile service that lets people transfer money to one another through text messages, just received an investment from Nokia, estimated at $70 million. [Update: It turns out that not all of this money came from Nokia, as most people reported. There were other undisclosed investors involved. TechCrunch suggests that several of Obopay's old-faithful firms also chipped in, including Qualcomm, Redpoint Ventures, Onset Ventures and Richmond Management, but nothing has been confirmed.] This gives the cell phone giant a minority stake in the company and a toehold in the mobile payment space.
So far, Obopay’s service works in the U.S. and India, linking people’s phones, bank accounts and credit card numbers for ease of withdrawal. It launched at a pretty opportune time, as mobile financial services have started to take off. One study, conducted by Berg Insight, projected that the market for these services will jump 89 percent every year until at least 2014.
Obopay faces a tough field of competitors, including PayPal Mobile (backed by eBay), Amazon’s TextPayMe and Mpayy. To help distinguish itself, Nokia — which has been exploring the space for a while now — is hard at work developing transponders for its phones that will eventually let users make payments simply by waving their handsets in front of scanners.
In the meantime, Obopay will further strengthen Nokia’s messaging technology roadmap. On the other side of the deal, the small Redwood City, Calif.-based company plans to use the investment to expand globally and continue product development.
It had previously raised $69 million from Qualcomm, Essar Communications Holdings Limited, Alliance Bernstein, ONSET Ventures, Redpoint Ventures, Richmond Management, Richmond Global Cellular, Citi, Societe Generale, Promethean, and Olayan America Corporation.
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About the Author, Camille Ricketts
Camille is the lead writer for GreenBeat. She came to VentureBeat from Google where she worked on its traditional platforms team, particularly in TV. Before that, she was a reporter for the Wall Street Journal in New York and London. Follow her on Twitter at @camillericketts, and follow VentureBeat on Twitter at @venturebeat.
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