You Must Remember This
A source familiar the deal told Betabeat yesterday that Venmo, a New York City-based mobile app that lets you split bills with friends, is in the process of being acquired by Braintree, a Chicago-based online payments company and PayPal competitor. The New York Times broke the news this afternoon, reporting a $26.2 million acquisition price. On the company blog, Venmo said the deal closed in mid-June and that its payment-sharing service “will remain unaffected” and continue to operate as a wholly-owned subsidiary.
Venmo and Braintree share an investor, Palo Alto powerhouse Accel Partners, which also invested in Facebook.
The two startups do seem to be in the midst of a mutual appreciation society. Last week, Braintree’s community manager Kristi Lynch tweeted, “I know it sounds weird, but the @Venmo app makes me wish I owed more people money.” Two Venmo employees favorited the tweet.
Venmo was founded in Philadelphia in 2009 by two former college roommates, Andrew Kortina and Iqram Magdon-Ismai. The duo eventually moved the company to New York City, where Venmo become one of the early stars in the city’s growing tech orbit, embraced by early adopters for making it easier to split the cost of dinner, drinks, monthly cable bills–or any of the innumerable costs of urban life–over their phones. There were even cutesy, customizable receipts, eagerly tweeted out by the Alley in-crowd.
Too busy to check your daily Betabeat? Here are the highlights from last week, as selected by the editors.
Betabeat visited our local pay-with-your-phone startup Venmo yesterday in the company’s overcrowded, underdecorated Chelsea office. It’s two floors above a spa and reminds us of a high school computer lab with the accompanying young people, T-shirts and computers, although the Macbooks were a bit nicer than the monstrous HP desktops we remember from class. We followed cofounder Andrew Kortina down two flights of stairs to a space Venmo has annexed on the second floor, scooted past an intern in Venmo’s bright blue shirt, and kicked a few employees out of a small conference room, where Mr. Kortina propped open the window with an umbrella. A DIY piece of art made out of nails and what appeared to be a piece of the ceiling spelled out “magic room.”
Venmo will probably outgrow its little office soon, although Mr. Kortina likes its proximity to both Penn Station and Whole Foods. Venmo is processing $10 million in transactions per month and growing 30 percent month-over-month. At that rate, give or take a few variables–Mr. Kortina is a data nerd–the company will do $250 million in transaction volume this year.
Perhaps that’s why Mr. Kortina seemed so laid back as Betabeat peppered him with questions about his competitors. But what about Dwolla? What about PayPal? What about Google Wallet? Mr. Kortina is tan and lean, eats kale salads and rides a bike, speaks evenly and takes unhurried pauses. He wishes Whole Foods would take Venmo, but in general, he is not worried about the competition.
Love Thy Developers
The Venmo team is up to 23 “young, passionate people,” as Mr. Kortina said, in an office in Chelsea and is processing $10 million in transactions a month. (Investor Ben Lerer predicted the startup will handle $250 million next year.) “It’s not really stuff that would be captured somewhere else,” he said. “Like if someone’s friend had a bachelor party and they couldn’t go, they could Venmo $20 to get drinks on them because they couldn’t be there. People are using this to share the experience they have when they go out with friends.” Read More
Foursquare hosted its second hackathon over the weekend at General Assembly, a surprisingly gender-balanced affair at General Assembly fueled by Pepsi products and beer from Sixpoint Craft Ales. Developers in Paris demonstrated more than 20 new foursquare apps; hackers in Japan demo’ed eight or nine. The New York hackathon produced about 25 apps, hacks and mashups.
Let’s just say there are a lot of new ways to play foursquare. Hackathon savant and newly-anointed Twilio evangelist Jon Gottfried and his team created Loo Review, a game for photographing and rating the city’s public toilets. Betabeat also liked CRawsome, a hack from Yipit’s Vinny Vacanti and Steve Pulec that texts venue managers when regulars and “social influencers” check in.
Perhaps 200 attendees were strewn across the floor, couches, and extra tables that had been set up in the main room, but only 50 were checked into General Assembly when Betabeat arrived in the afternoon for demos–probably because hackers had been checking in all day (about eight had stayed overnight to work on their projects). Just ten percent were present at the first foursquare hackathon in February, according to a show of hands.
OMGNATE. We posted about Nate Westheimer selling the first app he ever coded, Ohours, to Hirelite. Ohours was going great! People loved it! And yet Mr. Westheimer was ready to move on to bigger and better Rubylicious things. Although he demurred when we asked what. But the rumormill is suggesting it’s something to do with social gaming. A source tells Betabeat the stealth project is “a partnership with OMGPOP’s Forman,” referring to the infamous Charles, a friend of Mr. Westheimer’s.
The Start-Up Rundown
On his Tumblr today, former Vimeo co-founder Zach Klein took a break from his summer project building what looks like an off-the-grid cabin in the woods to announce a scholarship opportunity Peter Thiel would be proud of. To promote the value of peer-to-peer education, as opposed to that no good very bad institutionalized kind of book learning, Mr. Klein is offering $1,000 (total, not per person, sorry). Until the funds run out–or August 19th, whichever comes first–anyone who signs up for a class at Skillshare, where Mr. Klein notes he led the seed investment round through Founder’s Collective, can be reimbursed up to $20 worth of the ticket price. All you have to do is email your receipt to email@example.com.
The biggest start-up news of the last week was probably Google+ sucking up The Fridge, but New York start-ups are pushing features and hiring and having parties and moving to New York City:
WE’RE GOING TO NEW YORK CITY! Philly-and-New York-based mobile payments start-up Venmo will be setting up full-time shop in New York next week on the heels of announcing some new iPhone app features including the most commonly-requested passcode lock, which lets you lock the Venmo app with a four-digit PIN “in case your cat gets a hold of your iPhone.” You can also now scan a credit card by snapping a picture and check a box to check in on Foursquare when you split a bill.
INCREDIBLE JOURNEYS. New York start-up KeyWifi is trying to get people and businesses to share their wifi hot spots, bringing it up against security issues and legal challenges and other logistical hurdles. Betabeat spoke to founder Adam Black some months ago and we were not encouraged that the idea would ever get off the ground. But there’s been some movement: today the start-up announced three new hires. “KeyWifi is also feverishly growing, updating our technology and growing our customer base. To make this happen, our high-spirited, company founder, Adam Black, expanded the arsenal of KeyWifi talent with Product Director, Tom Hughes, Senior Technology Officer, Justin Fields and Community Development Manager, Jenn Lackey.”
Venmo isn’t a big enough player in mobile payments to merit trash talk from incumbent money-mongers Visa and PayPal the way Google has, but the New York and Philly-based company is making moves. It used to take up to two weeks to transfer money from Venmo to your bank account. Now it takes 24 hours, the result of working directly with banks. But is it Visa, PayPal or Google Venmo has to worry about? Bank of America, JPMorgan Chase and Wells Fargo are gradually rolling out a network within which seamless person-to-person payments can be done from a cell phone; ex-Twitter founded start-ups BankSimple and Square have their eyes on this feature as well.
Friends and money, they don’t always mix. But they have to: Exchanging money with friends is impossible to avoid. Drinks, taxis, dinners and cable bills are just some of the things for which we become financially indebted to each other, sometimes for substantial amounts (thanks, expensive City).
There are a few problems with this. Venmo, Read More