Funding is in vogue be it the international circuit where players like twitter and even iphone centric development startups are seeing interest from VCs. Closer to home, the scene may not be as hot as the US but it’s still good enough for a company like Paymate which has managed to raise 9 million $ in B series funding from PE funds like Mayfield Fund and existing investors Kleiner Perkins Caufield & Buyers and Sherpalo Ventures. There is no news on how much equity was diluted to raise this money. Though the paymate spokesperson mentioned to business standard that the money would be good enough for propagating growth for the company in a nascent m-commerce marketing in India for the next 18-24 months.
The m-commerce market has been the centerpiece of attraction for quite sometime now given the huge 260 million mobile user base and also some RBI policies to be expected to favour the same in the future. Also, Paymate, along with players like NGpay, Mchek has been gunning for the mobile payments market be it India or even outside in some cases. The key to their business is the tieups with financial institutions on the backend and the tieups with commerce and trade players on the front end which includes ticketing, utility payments, retail and ecommerce etc.
But there is still time for a mass scale adoption to this payment route by users as pointed out by PayMate’s director and co-founder Probir Roy, who said “It’s still early days for mobile commerce; it’s not as pervasive as a credit card or debit card but growing fast. But with increasing awareness of mobile as a device, it will grow at 30-35 per cent.”
On the whole, it does seem that there is potential and paymate seems to be doing all the right things for an early mover in a nascent market i.e. raising enough money, doing multiple tie ups and in general leading the industry. But funding along with its pro’s has its cons as well. A funded startup could become an alienated startup according to this article on venturewoods. The article by Vijay the Startup Guy rightly points out the fallacy of announcing amounts of funding which alienates a startup from an early adopters community. It also states that mindset of entrepreneurs who are very enthusiastic till the point of getting funding and do everything to engage the community but post funding they get disconnected. Read more to know more insights on how not to become an alienated brother post funding.
More funding updates as they come… Stay tuned.