Now that more and more Americans are carrying smartphones and at the same time have grown more comfortable with e-commerce, the retail world is seeing a meteoric rise in something called “m-commerce,” or the practice of buying services and products over mobile devices. While most m-commerce is still in the form of song downloads or gaming, sports and entertainment apps, this is starting to change. What’s also changing is the way people are paying for their m-commerce transactions. As a result, mobile payment solutions are also seeing a sharp rise in investment as those companies position themselves in anticipation of grabbing the lion’s share of the business.
Mobile payment solutions company Fortumo is the latest to see new investments. Fortumo provides mobile payment solutions for Web services and mobile applications, allowing customers to make mobile payments in more than 70 countries on six continents, with a strong presence on emerging markets. The fast-growing Fortumo, which launched in 2007 as a spin-off of the mobile services company Mobi Solutions, currently employs over 40 people in its offices in San Francisco, Tartu, Estonia and Beijing, China.
The company recently announced that Intel Capital and Greycroft Partners are to become new investors in a growth round of financing. Prior to this funding, Fortumo had been majority-owned by Mobi Solutions, an Estonian mobile solutions company that will remain a company shareholder. The company said the funding will be used to further strengthen Fortumo's position as the “go-to provider” for mobile payments in emerging markets.
“The opportunity in the mobile payments segment is enormous, and we believe that Fortumo is well positioned to capitalize on the trend of operator based billing, said Marcin Hejka, Managing Director of Intel Capital Eastern Europe, Middle East and Africa, in a statement announcing the funding. “The Fortumo team is a great example for the strong talent in the Central and Eastern European region able to build innovative and globally successful solutions.”
The company is also announcing that it has struck partnerships with two telecom giants: the UK’s Vodafone Group for direct operator billing in 13 countries, and with China Mobile. The company has also added several new clients to its merchant roster, including Gameloft, Vostu and Cut the Rope game-maker Zeptolab. Among its existing customers, Fortumo counts Rovio (of “Angry Birds” fame) and Badoo. Fortumo also provides Microsoft’s in-app payment solution for Windows 8.
"We have been impressed with Fortumo's strong product focus and ability to execute," says Dana Settle, a Partner with Greycroft. "What sets Fortumo apart from their competition is their focus on geographies where mobile payments will have the biggest impact and growth over the next few years." Worldwide gross transaction volume for mobile payments for digital goods is expected to more than double by 2015 to $268 billion.”
Edited by Brooke Neuman