Dwolla*, the Des Moines-based payment platform that has a strong presence in NYC, announced today that it has received a $16.5 million Series C investment led by venture capital behemoth Andreessen Horowitz, with contributions from NYC firms Thrive Capital* and Union Square Ventures. The fresh funding will allow Dwolla to double its staff of 40 to 80 and open a third office in San Francisco, according to The Next Web. Andreessen partner Scott Weiss will be joining Dwolla’s board.
Dwolla is a payment network that allows users to transfer money back and forth for free for transactions under $10 and a flat rate fee of $0.25 for those over $10. The platform hooks directly up to your bank account and offers transfer fees lower than what banks or credit card companies typically charge, positioning it as a legitimate competitor to conglomerates like Visa and Mastercard (not to mention that rumored deal with Square).
But the company also appears to have PayPal in its sights. In October, Dwolla announced a new MassPay feature that competes with PayPal’s “Mass Payment” function; MassPay allows users to send out payments to up to 2,000 people at once with just a few clicks. It’s worth noting that Jeff Jordan, the former President of PayPal, is a partner at Andreessen.
Mr. Weiss, who led the investment, explained on his blog why the firm chose to make such a big bet on Dwolla:
Founder/market fit: Ben is one of the most determined and scrappy entrepreneurs we’ve met and has a deep knowledge of the entire payment network.
Ridiculous market size: Dwolla’s FiSync is taking on ACH and FedWire, a combined $730+ trillion market with real-time transactions, new revenue streams and incentives for key players in the payment process.
A snowball of traction: Its annual processing run rate has moved from the hundreds of millions to billions and its business development pipeline is chock full of opportunities.
Mr. Weiss signed off: “I am excited to be joining Dwolla’s board of directors and look forward to helping Ben build the next multi-billion dollar payment company!” Enjoy all that dough, boys.