KPCB and Sherpalo pick up 33% stake in PayMate

By siliconindia   |   Tuesday, 26 September 2006, 07:00 Hrs
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Mumbai: Mumbai-based wireless transaction solutions company PayMate India is close to inking a deal with US-based venture capitalists Kleiner Perkins Caufield & Byers (KPCB) and Sherpalo Ventures, in which the VCs will pick up about 33 percent stake in the company.

Ajay Adiseshan, CEO, PayMate while saying that his company had received a part of VC funding from KPCB and Sherpalo, declined to comment on the exact size of equity holding that the US majors would have in the company.

“KPCB and Sherpalo are our partners in this latest and promising technology business in the mobile commerce space and the relationship is something more than a VC funding,” Adiseshan said.

The deal comes close on the heels of a commitment of $5 million (Rs 7.2 crore) funding from the same VC companies. Incidentally, Paymate, which launched its mobile payment technology a couple of months ago in India, had PricewaterhouseCoopers as the advisor to the deal.

Sources close to the deal said that KPCB and Sherpalo are likely to invest another $25 million (Rs 90 crore) in the Mumbai firm depending on the progress of the mobile-commerce technology initiative.

The promoters of Coruscant Tec, in collaboration with Citi Bank, launched PayMate. Currently, the former holds the majority stake in the company.

At present, the promoters of Coruscant Tec hold the majority stake in PayMate India. The company had launched the latest mobile payment technology, PayMate, in collaboration with Citi Bank. This secure method of payment is used by Citibank for its customers.

While Citibank is one of PayMate main customers, it is likely to finalize tie-ups with two-three leading banks in the near future. Sources close to the deal said Vinod Khosla promoted KPCB was bullish on investing in PayMate India since it was fascinated by its new mobile commerce technology.

According to the present modus-operandi with PayMate, a Citibank needs to send an SMS saying “PayMate” to ‘2484’ in order to sign up for the service. Once registered, he can shop at Rediff, Naukri, Cleartrip, Jeevansaathi and 99 Acres for their products. After the user has selected the product, he needs to send a single SMS accompanied by a unique pin, to confirm the transaction.

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