Des Moines-based payments startup Dwolla has raised a $16.5 million series C round from Andreessen Horowitz, with participation from Village Ventures, Thrive Capital, and Union Square Ventures. With this cash infusion, Dwolla tells us it plans to double its staff to 80 team members, open a new office in San Francisco and expand its enterprise-focused services.
If you haven’t used Dwolla before, it offers a service quite similar to PayPal, allowing users to send and receive payments with very low fees. We’ve written about Dwolla quite a bit over the past few years, covering everything from the company’s partnerships with school districts, to a hackathon where the first prize was a cow (seriously).
Dwolla has lately gone after much of PayPal’s own selling points with perks like wider-reaching mass payments. Unfortunately, even with additional funding, Dwolla tells us it has no plans yet to expand outside the US.
The core product is also not changing as a result of these new funds. Instead, today’s news is all about scale.
The company says it has never had a marketing budget before — now, new initiatives are in place to put Dwolla in front of more consumers.
As for FiSync, a product developed by Dwolla which brings real-time payments to financial institutions like banks (in competition with ACH), Dwolla tells us it doesn’t have enough staff “to serve all the interest that’s coming in.” Clearly, new hires will help ease this transition. Right now, only one financial institution publicly uses FiSync, but Dwolla tells us that “there are a multitude of financial institutions in various phases of integrating FiSync.”
For consumers, it seems the key weakness of Dwolla’s service still lies in its smaller size — PayPal is clearly still the default online payments network. Today’s news reflects how Dwolla hopes to rectify this issue, and with just 25 cent fees, I’m personally hoping the service can scale securely and pull through.
Image credit: Christa Richert