April 6, 2009
VC Affiliate of Goldman Sachs Invest $42 Million In Series C Funding for Revolution Money, Inc.
Based in St. Petersburg, Florida, Steve Case’s Revolution, LLC. announced that it received $42 million in series C funding from a Goldman Sachs affiliate and existing investors. Revolution Money, Inc. is a company that provides payments that are of high value for both merchants and consumers. The payments are provided through “RevolutionCard,” which is a service that basically eliminates the middle man by eliminating the costly interchange between merchants and consumers. This provides enormous savings for both parties. Furthermore, consumers feel secure by the network’s security features that protect them from identity theft and gives consumers superior payment flexibility and rewards. Revolution Money was founded in 2007 and its parent company is Revolution, LLC.
Other investors that participated in this round of funding include Citigroup, Inc.; AOL cofounder, Steve Case; Revolution Money chairman, Ted Leonsis; former Charles Schwab CEO, David Potruck; JP Morgan chairman, David Golden; and Morgan Stanley. According to Jason Hogg, founder and CEO of Revolution Money, this investment is a great endorsement for Revolution Money in these difficult economic times. As merchants and consumers search for savings and cost-cutting ways to do business, Revolution Money is a welcome alternative to expensive credit card companies and PayPal.
Proceeds from this round of funding will go to developing Revolution Money’s technology that provides all of Revolution Money’s popular services. In September of 2007, Revolution Money received a $50 million series B investment from Citigroup. Revolution Money’s two main services are RevolutionCard and RevolutionMoneyExchange. RevolutionCard is a general charge credit card that does not charge any interchange fees, and a half-percent transaction fee. This allows the consumer to save up to 80% of the money they spend with a regular credit card. This card has a PIN number and provides the best protection against identity theft and fraud. RevolutionMoneyExchange has over 400,000 users and provides a free internet-based P2P service that allows users to exchange money for free. Revolution Money has worked out a deal with Chase Bank that allows its RevolutionCard to be used for both internet payments as well as general in store payments.
In the United States, many retailers are benefiting from RevolutionCard. Some of the retailers who deal with RevolutionCard include T.J. Maxx, Barnes & Noble, Bed Bath & Beyond, KOHLS, Whole Foods, and others. RevolutionCard has stiff competition from well-known online payment company, PayPal and well established credit card companies, however, it's a huge market and even a small percentage of the market have the potential to bring in huge revenues.
Goldman Sachs is a well established bank that has an affiliate for investment into promising companies. Some of the investment services that Goldman Sachs provides are asset allocation, mutual funds, global investment services, asset management, etc.
Morgan Stanley offers several services related to investing. A Morgan Stanley advisor has access to the banks full scope of services and resources. Furthermore, Morgan Stanley also states that its investors fully understand the needs of their partners and are dedicated to the success in the companies they invest in.