Startup BOKU Shakes Up Mobile Pay Model; Acquires Paymo, Mobillcash

Today mobile payments start-up BOKU exited stealth mode and announced to the world it had acquired competitors Paymo and Mobillcash. The company is backed by a $13 million round of investments led by Benchmark Capital, with Index Ventures and Khosla Ventures also participating. The new company's CEO is former Mobillcash chief executive Mark Britto, with Javier Martell as VP, General Counsel. Erich Ringewald will be VP of Engineering and Kurt Davis VP of Business Development. The new mobile payment company will focus on fulfilling transactions where a user is buying digital content such as virtual goods with nothing more than a handset and a mobile service provider.

"We want to create the industry standard for mobile payments and we think we have the pieces necessary to do that. If you want to monetize, increase the pie where you're getting customers," said Ron Hirson, VP of Product and Marketing for BOKU. "You can get money from countries where payment from mobile is easier and safer than credit. Our conversion rates are much higher, in the 50% to 70% range."

Hirson claims that Boku will be accepted by hundreds of apps on Facebook, MySpace, and Hi5, including top apps like Mob Wars and (Lil) Green Patch. He also cites Puzzle Pirates and the Aeria Games freemium game portal as clients. Offerpal and Super Rewards will also feature Boku support, as will the Hi5 social network.

BOKU's mobile pay technology bills itself as quite easy to use. As the demo video shows, users simply input their phone number and agree to payments by sending and receiving SMS text messages. The charges appear on the user's next mobile phone bill. The BOKU payment technology is designed to pass along the carrier transaction fee to the customer, letting him or her see the total cost of paying by mobile before agreeing to the transaction.

According to Hirson, who maintains an Entrepreneur in Resident title at Khosla, BOKU is emerging from stealth as the de facto industry
leader in mobile payment. Hirson claims that Mobillcash was
neck-and-neck with its rival Zong before it was acquired by BOKU.
Thanks to the combined market share of both Mobillcash and Paymo,
Hirson claims BOKU now has twice the coverage of any other mobile
payment competitor. BOKU is available on all US carriers and globally
reaches 1.6 billion consumers in over 50 countries.

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