Obopay scores $29M in VC funds

Mobile payment startup Obopay padded its bank account, hauling in $29 million in a third round of funding.
Richmond Management L.L.C. affiliate Richmond Global Cellular led the round and existing investors Qualcomm Inc., Redpoint Ventures and others participated. Obopay also added new backers including AllianceBernstein L.P., Citi and Societe General.
“The wide-ranging contacts and collective experience of our new investors will bring significant value to Obopay as we strive to expand our business in our home base of the U.S.,” said CEO Carol Realini.
Obopay has gained traction with some impressive deals thanks to its debit card-based application that allows users to transfer funds from their phones and make payments at brick-and-mortar retailers. The company has accrued $46 million in venture capital since its launch last year and has inked deals with Citi, AOL and several U.S. carriers.
Meanwhile, PayPal launched a Mobile Checkout service that allows users to visit online storefronts and purchase goods and services from their handsets. The service complements PayPal’s Text to Buy program, which enables users to send codes via text message to consummate purchases.
The announcements underscore two very different strategies in these early days of mobile payments. Obopay and other startups hope to gain a foothold primarily by allowing users to send money to and receive money from other users, while PayPal is wagering that mobile subscribers will buy goods and services with their phones. While analysts generally agree that the market for wireless payments is potentially vast, it’s unclear how consumers may want to use their phones as a mobile wallet.
“The technology is available now to enable secure and fast payments to be initiated on the mobile phone,” said Alan Goode of Juniper Research, which recently predicted wireless payments will ring up $22 billion in transactions by 2011. “The business model still needs some work, but there are positive signals emanating from the industry that will create considerable revenue for all parts of the ecosystem. I am cautiously optimistic for the future success of m-payments.”