PayPal to startups: Love us!
In an effort to help support promising new startups, the payments giant announced the PayPal Startup Blueprint Program today, which will waive $50,000 worth of processing fees for selected startups. Additionally, the chosen companies will get “white glove” customer service from PayPal specifically targeted at developers.
PayPal says eligible startups have to be focused on mobile or web-based software and services, be making less than $3 million annually, and be under five years old. The company is working together with top accelerators and incubators like 500startups, Seedcamp, and Elevator to find startups. For now, they’ll have to be nominated by PayPal or one of its partners, but eventually the program could open up to more startups.
As PayPal’s developer relations head John Lunn tells me, the Startup Blueprint Program came about as PayPal thought of ways to help young startups. Waving fees may not seem that exciting, but it could be immensely useful for a new company, and it’s also a better option than forming a venture arm and making startups give up their equity for funding.
“If you’ve got a venture wing you can only back certain companies, now we can spread a wider net and support more startups,” Lunn said. “It’s a better general message than just funding one or two startups. PayPal is buying startups all the time, that’s a separate activity than what we’re doing here.”
Lunn tells me that PayPal will wave fees for about $1.3 million to $1.4 million worth of transactions, or for 18 months — whichever a company hits first. Startups will also get a direct contact at PayPal to deal with any transaction issues, and their accounts will be monitored specially for any anomalies.
“We’re trying to be very proactive, rather than reactive [when it comes to account issues],” Lunn said.
The program could be a sign of how PayPal wants to support all startups in the future. It’s also yet another sign of PayPal’s focus on developers — the company recently agreed to acquire payment processor Braintree for $800 million, which will eventually serve as its new developer platform. [Check out my interview with John Lunn about what the Braintree deal means for PayPal.]
Just like many of PayPal’s recent announcements — a new “Customer First” initiative; free payments processing for stores that upgrade to its point-of-sale service; and new mobile apps that finally deliver on the company’s mobile payments promises — the Blueprint Program is basically a way for PayPal to prove that it’s listening to its critics, and paying more attention to customers.