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This article was published on March 15, 2012

Boku raises $35m from Telefónica and others, as the mobile payments race heats up

Boku raises $35m from Telefónica and others, as the mobile payments race heats up
Paul Sawers
Story by

Paul Sawers

Paul Sawers was a reporter with The Next Web in various roles from May 2011 to November 2014. Follow Paul on Twitter: @psawers or check h Paul Sawers was a reporter with The Next Web in various roles from May 2011 to November 2014. Follow Paul on Twitter: @psawers or check him out on Google+.

Mobile payments platform Boku has announced that it has secured a further $35 million in funding from Telefónica Digital, New Enterprise Associates (NEA), and a host of previous investors, including Andreessen Horowitz, Benchmark Capital, DAG Ventures, Index Ventures and Khosla Ventures.

This latest cash injection now means that the San Francisco-based startup has secured a total of $75m across a series of funding rounds since 2009.

We first reported on Boku a couple of weeks back, when it launched Boku Accounts to enable transactions to be carried out at point-of-sale (POS) in stores, with payments being charged to the user’s mobile phone bill.

The new white-label Boku Accounts platform allow Mobile Network Operators (MNOs) to issue their subscribers a branded mobile payment account (e.g. ‘Vodafone’ or ‘T-Mobile’), which are accessible through mobile devices (Web, iOS, Android, and HTML5) and computers. Subscribers can now make payments online, in-app, and in-store – through a branded debit card or NFC-enabled POS.

“Boku Accounts brings together the best parts of mobile payments and technology, leveraging NFC, smartphones and global payment networks for a better consumer experience,” said Mark Britto, Boku CEO at the time. “We are leveraging the power of the device in your pocket to improve every transaction you make, anywhere in the world, and helping our MNO partners expand into the offline world, while bringing tremendous value to their subscribers and merchants alike.”

The startup now operates in 67 countries, working with more than 250 carriers across 40 different currencies. Boku’s funding will be used to expand its team, broaden the infrastructure and continue its international expansion.

“Payments is an industry that requires scale, and in the three years since Boku launched, we’ve grown rapidly to partner with more than 250 mobile network operators, processing transactions in 67 countries around the world,” said Britto. “We see this investment as a clear vote of confidence from our new partners at NEA and Telefónica. They recognize that we’ve established a mobile billing system that offers bank-grade technology on a global scale; this strategic investment will help us expand our business as well as facilitate the growth of our new Boku Accounts platform.”

Telefónica Digital is the global business unit announced by Telefónica back in September 2011, to spearhead the telecom company’s digital growth, and it has also been investing in its startup accelerator Wayra with a view towards driving innovation. Its global HQ will be opening in London in the summer.

This latest investment is a telling one too, and it’s clear that Telefónica is committed to bringing mobile wallet and other related payments services to its customers across its businesses and through Wanda, its joint venture in Latin America with MasterCard.

“Payments are going mobile and we want to be at the forefront of this trend,” said Matthew Key, Chairman & CEO, Telefónica Digital. “Boku has quickly established itself as a true innovator in the mobile commerce space and this investment gives us access to their tools, infrastructure and know how, ideally complementing our own mobile payments expertise.”

Key went on to explain that, in addition to the investment, it will also be embarking on a major global partnership with Boku “to enhance our operator billing capabilities and the overall payment experience through our future mobile wallet services.”

We’re really starting to see some major innovations taking off in the mobile payments space, and whilst we’re still in the very early stages, this mammoth funding round is indicative of its potential. It could – and likely will be – huge. This is something we covered extensively in our Future of Online Banking feature from a couple of weeks ago.

With PayPal launching its new Digital Wallet at SXSW in Texas this week, Google Wallet hanging in the wings, Square making inroads, and Pingit proving popular for Barclays’ customers in the UK, 2012 is shaping up for a very big year in the mobile payments space. And with $35m extra in its coffers, Boku will be a major contender.