Andreessen Horowitz is betting $25.5 million that consumers will get behind yet another way to make payments online.
The venture capital firm co-founded by Internet pioneer Marc Andreessen is leading a round of funding for Jumio, a Mountain View, California-based startup that uses image-recognition technology to help people make purchases securely. The infusion gives Jumio a valuation north of $100 million, people with knowledge of the matter said. One Jumio product, Netswipe, reads a credit card waved in front of a webcam. The other, Netverify, validates a user’s identity via driver’s license or passport.
The company is taking a new approach to tackle fraud, a challenge that has plagued companies from the earliest days of the Web, said Jumio Chief Executive Officer and Founder Daniel Mattes. He said he aims to strike partnerships with some of the biggest names in tech — Facebook, Groupon and Microsoft’s Skype — to streamline payments. “Skype, Airbnb, Facebook, Groupon – all of them have the same problem,” Mattes said. “They’re accepting credit cards, and they have to deal with fraud.”
Jumio makes money by charging the companies that use Netswipe as much as 2.75 percent of each transaction and those that use Netverify $1 per verification.
With the investment, Andreessen Horowitz partner Scott Weiss joins the board, which includes Facebook co-founder Eduardo Saverin, an early investor. This round will bring total funding to $32 million, and let Jumio add 50 to 100 people to its staff of 45, Mattes said. Bloomberg LP, the parent of Bloomberg.com, is an investor in Andreessen Horowitz.
Jumio’s challenge will be to stay relevant as banks and credit card companies push consumers to go cardless and use handsets to buy stuff instead. Payments networks, such as Visa and Mastercard, advocate near-field communication technology, which lets people make payments by tapping a mobile phone against a cash-register system. One in five smartphones will be NFC-enabled by 2014, researcher Juniper estimates.
Mattes, 39, founded Skype competitor Jajah before selling it to Telefonica SA for more than $200 million in 2009. Jumio aims to strike partnerships with card-issuing banks as a way of gaining access to their millions of consumers. “We see ourselves more like industry neighbors,” he said. “Paypal could actually use our technology for the sign up process, the credit card uploading process.”