Zong, a mobile payments service, has raised $15 million in funding. Matrix Partners led the round. The Palo Alto-based company was formerly a division of Echovox but now said it's a standalone business.
The startup's focus falls into the very lucrative space of virtual currency for social gaming. The company's most recent deal is quite massive. Zong announced it is the mobile payment provider for Facebook Credits, a new virtual currency platform which will be deployed across the largest social networking site in the world. Facebook has around 400 million users and growing.
Beyond Facebook, Zong said it works with thousands of other merchants in the virtual worlds space (like IMVU), social networking (Facebook), online gaming and digital content properties. It differentiates itself from other mobile payment companies by communing carrier billing with multiple payment sources, like credit or debit, all via a cellphone.
The whole goal is to make the process pretty seamless for the impulse buyer and Zong has definitely seen success in this. It converts shoppers into buyers at rates of 10 times greater than a traditional payment.
The company said it now reaches over 1.5 billion mobile users, providing payments across 30 countries.
How does Zong make money? It takes a 5-10% transaction fee from every purchase.
“We are thrilled to have the support and guidance of Matrix Partners, which has a phenomenal track record in developing select mobile, wireless and internet companies,” said David Marcus, founder and CEO, Zong.
Zong said it would use the funds to "further market leadership by accelerating the growth of its merchant network in US and international markets and through funding the rapid expansion of its mobile carrier network."