WePay can most quickly be described as a sort of Paypal for groups. It allows users to collect, manage and send money as a group online.
Hypothetically, it works well for clubs, small organizations, roommates and other groups and could become a household name — at any rate, the VCs at Highland Capital certainly think so. They’ve led a $7.5 million Series B for the startup, which was joined by August Capital. The latter firm also led the startup’s Series A eight months ago. Dave McClure and Ron Conway were also early investors.
WePay began as a Y Combinator startup and has recently added Rasmus Lerdorf, the creator of PHP, as a lead developer on the company’s APIs.
If you’re a brilliant hacker and you think you’d might like to work with Lerdorf and the rest of the WePay team, you’re in luck; the latest round of funding will partly be used to beef up the company’s engineering staff. Co-founder and CEO Bill Clerico said in a release today, “After several months of both steady growth and exceptional user engagement, this latest round of financing will allow us to substantially expand our operations and engineering team, dramatically increase marketing efforts and continue to build our user base.”
This type of deal is consistent with the ever-popular trend of funding startups that have built-in revenue mechanisms. Although signup, group creation, joining a group and making payments are all free on WePay, the site charges a flat fee or percentage for all incoming transactions. The company’s also listed a healthy roster of charges for its prepaid Visa cards.
With that kind of revenue stream baked into the service, what is a 50-cents-here, 3.5%-there trickle at the outset can turn into a billion-dollar tsunami at scale, a fact which no investor could overlook.
What do you think: Does WePay’s service have you seeing dollar signs?
[img credit: donbuciak]
Reviews: PHP
More About: funding, series b, vc, venture capital, wepay, y combinator
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