PayPal is diving deeper into mobile with the purchase of StackMob, a San Francisco startup that makes a cloud-based backend for mobile applications. StackMob customers include Verizon Wireless, Citibank, McKinsey & Company, Intuit, Atari, Accenture and the Federal Reserve Bank of Boston.
Despite its impressive client list, StackMob was apparently struggling financially. The company offered a “freemium” version of its backend services, and in a blog post announcing the PayPal deal co-founder Ty Amell alluded to problems with the business model. “One challenge, however, remained constant over time: monetization and payments,” he wrote.
StackMob has been in business since 2010 and had raised $7.5 million in 2011, but was reportedly having a hard time securing a second round of funding. PayPal, which is owned by EBay, did not disclose the StackMob purchase price.
“StackMob is best known for its outstanding work in developing a platform that lets developers and companies easily create and manage mobile applications,” blogged PayPay CTO John Barrese. “We are thrilled to have the StackMob team put those same skills and expertise toward enhancing PayPal’s technology stack.”
PayPal currently offers a mobile payments app, as well as a device for merchants called the Beacon that triggers the PayPal app on a customer’s smartphone when the customer enters the store. Earlier this year, PayPal parent EBay paid $800 million for Braintree, and saying the online payments specialist was a perfect fit with PayPal.
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