Estonian mobile payments company gets $10M from Intel Capital

Photo: Fortumo

Fortumo, a mobile payments company with offices in Estonia, San Francisco and Beijing, announced today that Intel Capital and Greycroft Partners will be new investors in a growth round of financing. Prior to the funding, Fortumo has been majority-owned by Mobi Solutions, an Estonian mobile solutions company, which will remain a shareholder. The funding will be used to further strengthen Fortumo’s position as the go-to provider for mobile payments in emerging markets, reported Fortumo.

“The opportunity in the mobile payments segment is enormous, and we believe that Fortumo is well positioned to capitalize on the trend of operator based billing, says Marcin Hejka, Managing Director of Intel Capital Eastern Europe, Middle East and Africa. “The Fortumo team is a great example for the strong talent in the Central and Eastern European region able to build innovative and globally successful solutions. ”

Fortumo is also announcing new direct contracts with two of the largest telecommunications groups in the world: Vodafone Group for direct operator billing in 13 countries and with China Mobile.  Fortumo has also recently added Gameloft, Vostu and Cut the Rope game-maker Zeptolab to its growing list of blue chip merchants, which already includes Rovio (publisher of the Angry Birds line of games) Badoo, and others. Recently, Fortumo has partnered with Microsoft to promote it’s in-app payments solution for Windows 8.

“We have been impressed with Fortumo’s strong product focus and ability to execute,” says Dana Settle, a Partner with Greycroft. “What sets Fortumo apart from their competition is their focus on geographies where mobile payments will have the biggest impact and growth over the next few years.” Worldwide gross transaction volume for mobile payments for digital goods is expected to more than double by 2015 to $268 billion.

“Fortumo is a fast-growing, profitable company with a global footprint and strong management team,” says Klaus Konrad, Investment Director of Intel Capital. “We’re excited about being part of Fortumo’s strategy of bringing seamless mobile payments to more users, merchants, and mobile operators worldwide.”

Fortumo’s system works via direct carrier billing. Customers pay for digital goods via their mobile billing plans with their mobile operators rather than cash, credit cards, or debt cards. Carrier billing is a strong alternative to credit cards for purchasing virtual and digital goods. Fortumo features payment connectivity with over 300 mobile operators in 80 countries, including a number of exclusive direct carrier billing partnerships. Mobile billing is available for over four billion mobile users worldwide without a need to register or have a credit card.

“Our competitors in the mobile payments space have focused mostly on the US and on Western Europe,” says Rain Rannu, co-founder and CEO of Fortumo. “While Fortumo covers these regions well, what differentiates us is our strong emphasis on emerging and growth markets where credit card penetration may be low but mobile usage is very high. Working with Intel Capital and Greycroft will help us to pursue additional growth opportunities, including strategic partnerships and acquisitions.”

Fortumo is the only carrier billing company to operate on a self-service concept, allowing any merchant to sign up via the Fortumo Web site and to start accepting mobile payments. Fortumo’s payments system is optimized for all key platforms, including Web, mobile web, HTML5, and in-app purchases on both smartphones and tablet devices. Fortumo has been profitable since 2009 and has added over 72,000 registered merchants, including several of the world’s largest gaming companies and content publishers, over the past 5 years.