Zong Raises $15 Million in Funding from Matrix Partners

Funding Will Be Used to Further Its Market Leadership, Expand Merchant and Carrier Networks and Continue Growth into International Markets

PALO ALTO, Calif.--(BUSINESS WIRE)--Zong (www.Zong.com), the leading mobile payment service used by online gaming and social networking websites, announced today that it has completed a $15 million round of funding led by Matrix Partners. 

Formerly a division of Echovox, Zong is now a standalone company headquartered in Palo Alto and will use the investment to further market leadership by accelerating the growth of its merchant network in US and international markets and through funding the rapid expansion of its mobile carrier network.

“We are thrilled to have the support and guidance of Matrix Partners, which has a phenomenal track record in developing select mobile, wireless and internet companies”

Zong is the mobile payment provider for Facebook Credits, a new virtual currency platform being deployed across the Facebook network of over 400 million monthly active users. Zong also works with thousands of other merchants in a variety of spaces including: popular virtual worlds, online gaming, social networking and digital content properties. Zong is the only mobile payments service that combines carrier billing with credit, debit and prepaid cards, allowing Zong to be the first company to allow multiple payment options via the mobile phone.

“We are thrilled to have the support and guidance of Matrix Partners, which has a phenomenal track record in developing select mobile, wireless and internet companies,” said David Marcus, founder and CEO, Zong. “With this comes the privilege of working closely with Dana Stalder, who as a result of his extensive experience with PayPal, will be of great value to our team.”

Dana Stalder, general partner of Matrix, will join Zong’s board of directors bringing more than 20 years of experience to the company. He has extensive knowledge in financial services and ecommerce, having served in executive positions at Netscape, eBay and PayPal. Stalder also initiated a number of other startup projects, including PayPal Mobile and the PayPal Developer Platform.

“Matrix’s message has been clear. We are committed to helping build significant, industry leading companies and Zong fits that bill,” said Stalder. “Zong is at the forefront of the evolution of the payments space and we hope to play a key role in its continued growth and success.”

About Zong

ZONG is the leading mobile payment service used by online gaming and social networking sites around the world. Its frictionless payment experience converts shoppers into buyers at rates up to 10 times greater than traditional payment methods. ZONG leverages direct connections with mobile network operators around the world to provide consumers, merchants and publishers a secure payment solution with unrivaled connectivity and service quality. ZONG is the mobile payment provider for Facebook Credits and also works with hundreds of leading destination sites, such as Gaia Online, IMVU and Aeria Games. Reaching over 1.5 billion mobile users, ZONG provides local payment capabilities in over 30 countries in 16 languages. ZONG is the only mobile payment service that combines the high conversion rates of carrier billing with the low costs and flexibility of payment card networks. ZONG is based in Palo Alto and Geneva, and is backed by Advent Venture Partners and Newbury Ventures. For more information, please visit www.zong.com.

About Matrix Partners

Matrix Partners is a premier venture capital firm that has generated outstanding returns for over three decades. The firm has delivered several of the industry’s top performing funds of all time. Matrix Partners has offices in Waltham, MA; New York, NY; Palo Alto, CA; Mumbai, India; and Beijing and Shanghai, China. The firm has been fortunate to have invested in game-changing, industry-leading businesses such as Apple Computer, Sandisk, Veritas, Sycamore Networks, Phone.com, Starent Networks, JBoss and Gilt Groupe.

Contacts

Zong

Brew Media Relations

Dorothy Jean, 212-677-4835 x. 12

dorothy@brewpr.com

or

Matrix Partners

GMK Communications

Stephanie Gnibus, 408-776-9727

stephanie@gmkcommunications.com

Permalink: http://www.businesswire.com/news/home/20100427005755/en/Zong-Raises-15-Million-Funding-Matrix-Partners

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• Zong's credit-card based mobile payments system is growing fast (mobile.venturebeat.com)


• Zong Sees Exceptional Growth (eon.businesswire.com)

Zong Raises $15 Million in Funding from Matrix Partners

Funding Will Be Used to Further Its Market Leadership, Expand Merchant and Carrier Networks and Continue Growth into International Markets

PALO ALTO, Calif.--(BUSINESS WIRE)--Zong (www.Zong.com), the leading mobile payment service used by online gaming and social networking websites, announced today that it has completed a $15 million round of funding led by Matrix Partners. 

Formerly a division of Echovox, Zong is now a standalone company headquartered in Palo Alto and will use the investment to further market leadership by accelerating the growth of its merchant network in US and international markets and through funding the rapid expansion of its mobile carrier network.

“We are thrilled to have the support and guidance of Matrix Partners, which has a phenomenal track record in developing select mobile, wireless and internet companies”

Zong is the mobile payment provider for Facebook Credits, a new virtual currency platform being deployed across the Facebook network of over 400 million monthly active users. Zong also works with thousands of other merchants in a variety of spaces including: popular virtual worlds, online gaming, social networking and digital content properties. Zong is the only mobile payments service that combines carrier billing with credit, debit and prepaid cards, allowing Zong to be the first company to allow multiple payment options via the mobile phone.

“We are thrilled to have the support and guidance of Matrix Partners, which has a phenomenal track record in developing select mobile, wireless and internet companies,” said David Marcus, founder and CEO, Zong. “With this comes the privilege of working closely with Dana Stalder, who as a result of his extensive experience with PayPal, will be of great value to our team.”

Dana Stalder, general partner of Matrix, will join Zong’s board of directors bringing more than 20 years of experience to the company. He has extensive knowledge in financial services and ecommerce, having served in executive positions at Netscape, eBay and PayPal. Stalder also initiated a number of other startup projects, including PayPal Mobile and the PayPal Developer Platform.

“Matrix’s message has been clear. We are committed to helping build significant, industry leading companies and Zong fits that bill,” said Stalder. “Zong is at the forefront of the evolution of the payments space and we hope to play a key role in its continued growth and success.”

About Zong

ZONG is the leading mobile payment service used by online gaming and social networking sites around the world. Its frictionless payment experience converts shoppers into buyers at rates up to 10 times greater than traditional payment methods. ZONG leverages direct connections with mobile network operators around the world to provide consumers, merchants and publishers a secure payment solution with unrivaled connectivity and service quality. ZONG is the mobile payment provider for Facebook Credits and also works with hundreds of leading destination sites, such as Gaia Online, IMVU and Aeria Games. Reaching over 1.5 billion mobile users, ZONG provides local payment capabilities in over 30 countries in 16 languages. ZONG is the only mobile payment service that combines the high conversion rates of carrier billing with the low costs and flexibility of payment card networks. ZONG is based in Palo Alto and Geneva, and is backed by Advent Venture Partners and Newbury Ventures. For more information, please visit www.zong.com.

About Matrix Partners

Matrix Partners is a premier venture capital firm that has generated outstanding returns for over three decades. The firm has delivered several of the industry’s top performing funds of all time. Matrix Partners has offices in Waltham, MA; New York, NY; Palo Alto, CA; Mumbai, India; and Beijing and Shanghai, China. The firm has been fortunate to have invested in game-changing, industry-leading businesses such as Apple Computer, Sandisk, Veritas, Sycamore Networks, Phone.com, Starent Networks, JBoss and Gilt Groupe.

Contacts

Zong

Brew Media Relations

Dorothy Jean, 212-677-4835 x. 12

dorothy@brewpr.com

or

Matrix Partners

GMK Communications

Stephanie Gnibus, 408-776-9727

stephanie@gmkcommunications.com

Permalink: http://www.businesswire.com/news/home/20100427005755/en/Zong-Raises-15-Million-Funding-Matrix-Partners

Related articles by Zemanta

• Zong's credit-card based mobile payments system is growing fast (mobile.venturebeat.com)


• Zong Sees Exceptional Growth (eon.businesswire.com)

Zong Sees Exceptional Growth

Zong⁺ Confirmed as a Game Changer, Secures New Landmark Deals and Continues Carrier Expansion

PALO ALTO, Calif.--(BUSINESS WIRE)--Zong (www.Zong.com), the leading mobile payment platform used by online gaming and social networking web sites, announced today that Zong+ has delivered unprecedented payment volumes to its merchants. Zong+, launched at the end of last year, is the only online mobile payment platform to combine carrier billing with the low cost processing of credit, debit, and prepaid cards. Only six weeks after upgrading to Zong+, Aeria Games, one of the fastest growing publishers of free-to-Play online games, reported:

• Over 32% of Aeria’s mobile payment revenue from Zong came from Zong⁺ users;


• Zong⁺ transactions generated an average payout 12 times higher than traditional mobile payments, due to a combination of higher payout rates and flexible price points;


• A massive 67% drop in transaction costs with Zong⁺ over traditional mobile payments;


• A 48% increase in repeat payments—Zong+ users completed an average of 4.3 transactions per month, while regular users completed an average of 2.7 transactions;


• 100% incremental revenue: no cannibalization of existing card or carrier-based payment volumes.

“When we started thinking about Zong+, we were convinced that combining the convenience of carrier-based mobile payments with established payment methods had tremendous potential,” said David Marcus, founder and CEO of Zong. “We're thrilled that these initial results were well above our expectations.”



Additionally, since the beginning of 2010, Zong has grown by over 20 major publishers, including IAC’s Mindspark, Playdom, Slide, Kongregate, and TrialPay. Through its wide merchant distribution, Zong’s reach has surpassed over 500 million online users, while its carrier distribution just reached 1.5 billion mobile subscribers.



“The impulse nature of in-game purchases, prompted us to find the most convenient and efficient payment method for our users,” said Jim Greer, CEO of Kongregate. “Zong provides a fantastic user-experience and reach for our members to purchase our virtual currency, Kreds, with the ease and convenience of a ten digit mobile number.”



Also, in the last six weeks, Zong has not only expanded its merchant distribution, but also its country and carrier coverage by adding New Zealand, Argentina, and Venezuela, with Brazil, Indonesia, Singapore, Taiwan, and Malaysia to follow shortly.



About Zong:



ZONG, the leading mobile payment service used by online gaming and social networking web sites, converts shoppers into buyers at rates up to 10 times greater than traditional payment methods. ZONG leverages direct connections with leading mobile network operators around the world to provide unrivaled connectivity and service quality. ZONG works with hundreds of top applications on popular social networks—such as Facebook and MySpace—and powers mobile monetization in leading virtual worlds and gaming sites, such as Gaia Online, IMVU and Aeria Games. In 2009, ZONG processed mobile payments for over 10 million unique users worldwide. In October 2009 ZONG released ZONG+ which combines the high conversion rates of mobile payments with the low costs of payment card networks. ZONG+ received the Frost+Sullivan Best Practices Award for product innovation. For more information, please visit www.zong.com.