Originally launched as a group payments platform to help friends and family pool their resources, Palo Alto-based WePay has since expanded to offer online payment tools for merchants and non-profit organizations, putting it in direct competition with established players like PayPal. Today, the startup is announcing a $10 million round led by Ignition Partners and including existing investors Highland Capital Partners and August Capital to help it continue its growth, following a tenfold expansion in business in 2011.
WePay is aiming to compete with PayPal for SMB customers, where COO and co-founder Rich Aberman told BetaKit it offers advantages in terms of ramp up time, fees, setup and installation. As Aberman described it, WePay offers “one-stop shop tools to get anyone up and running accepting payments online, the way that they want to accept payments,” which the company sees as more broadly appealing than PayPal’s offerings. WePay charges a flat rate of 3.5 percent per transaction (compared to PayPal’s 2.9 percent plus $0.30), and only charges $0.50 if funds are drawn from a user’s bank account instead of a credit card. The company also targets non-profits and those looking to raise money with a donation page creation tool and the same 3.5 percent rate it charges businesses, less than funding site competitors First Giving and Kickstarter.
Aberman said that WePay intends to use the money to help it expand its team, which currently sits at 40 people, via new hires, and also to build out the company’s technology, including helping with new initiatives designed to help increase WePay’s mobile capabilities. While Aberman wouldn’t provide any specifics about the company’s mobile plans, he did acknowledge that there he sees huge opportunity for his company in that area.
“Right now, mobile just hasn’t been our core focus, but we’ve recognized the opportunity there and we plan to invest more in it as time goes on,” he said. While he didn’t talk about particular plans, he did say that in general, WePay will “make it easier to make payments via mobile to our partner merchants.”
WePay’s broadened focus has been good for the company so far, and now with a fresh injection of funding they should be in a better position to take on industry leaders. They might face bigger challenges from other startups making headway in the online payment space like Stripe, though currently, WePay’s prioritization of end-user simplicity and Stripe’s emphasis of developer-friendly tools put them on areas of the spectrum that have relatively little overlap. WePay does offer an API designed to help make it easier for developers to integrate its solution into their products, however, and that’s an area where Abermand said the company is seeing a lot of growth.
Online payments is an area with a lot of established players, but startups like WePay are demonstrating that there’s an opportunity for companies taking a fresh approach to help address pain points merchants aren’t seeing larger companies address.