Zong, a mobile payments startup that helps social gamers buy virtual goods, raised $15 million from Matrix Partners. The company, which started off as a division of Echovox and rode the wave of the booming virtual-goods industry, has now spun-off as an independent enterprise. It’s also cemented a long-in-the-works deal to be the mobile payments provider for Facebook’s new virtual currency Credits.
“We are really experts are the impulse buy and in giving that frictionless user experience,” said Hill Ferguson, the company’s head of marketing. “We let people playing games have minimal disruption when they’re paying for goods.”
He added that the company expects revenue to grow fourfold this year and said the company is facilitating total payments volume of in the “hundreds of millions.” Zong takes a small 5 to 10 percent cut of every transaction it processes.
About one-third of Zong’s activity is in the U.S., another third is in Western Europe, and the rest is in other parts of the world. The new round of funding will go toward breaking into other smaller Asian markets. Ferguson said the company has kept its powder dry in the bigger Asian markets where virtual goods and mobile payments are quite mature.
Dana Stalder, a general partner at Matrix and a former PayPal executive who built up the company’s mobile offerings and developer platform, joins Zong’s board of directors.