Braintree buys Venmo for $26.2m; mobile payments

Summary:Payments company Braintree has purchased startup Venmo, which lets people send and receive money to their friends.

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Who will manage your digital wallet?

Braintree, a company that makes technology to process credit card transactions on mobile phones, has purchased mobile payments startup Venmo for $26.2 million. 

The three-year-old startup, which began as a two-person operation in Philadelphia before moving and growing to 23 heads in New York, had raised just $1.2 million in venture funding. (Investors included Lerer Ventures, Accel Partners, Greycroft Partners and others, along with individuals Dave Morin, Sam Lessin and Dustin Moskovitz.)

The company has attempted to position itself as the one that will take the digital payments baton from PayPal, which it says is stuck in the web-based age and hasn't caught up with the mobile revolution. Whatever the reason, it's working: Venmo processes some $10 million per month, and expects to ring in the New Year with an annual total of $250 million.

The fit with Chicago, Ill.-based Braintree is only natural. That company's technology is used by popular e-commerce sites such as LivingSocial, Uber, Airbnb and Fab.com. (The technology is also used by the Angry Bird games.) The plan is to integrate the two technologies so that customers can use their Venmo accounts for e-commerce on the web, too.

Topics: Banking

About

Andrew Nusca is a former writer-editor for ZDNet and contributor to CNET. He is also the former editor of SmartPlanet, ZDNet's sister site about innovation. He writes about business, technology and design now but used to cover finance, fashion and culture. He was an intern at Money, Men's Vogue, Popular Mechanics and the New York Daily Ne... Full Bio

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