Hi. While this blog is a part of Seed Catalyst’s website, I realised over the initial few weeks that a lot of you are first introduced to the firm via the blog rather than our home page.
So to introduce myself - I’m a business consultant working with early stage technology firms to help streamline their strategy and go-to-market approach and support them for fund raising.
With this blog, I aim to capture key market trends that I see in the industry, the ecosystem and cross-plays in some of the more interesting and upcoming sectors, as well as cover interesting companies that I meet.
I will also be addressing vexing and interesting valuation and deal/term-sheet structures that would be of interest to technology start-ups at various stages of their growth.
Verizon's recent investment (no matter how small - $400k) is certainly of interest now as well as in the long term - we're talking about CardStar.
The company is one of the most popular mobile loyalty program applications currently in the market. Their aim is to replace the various loyalty, frequent flyer cards etc which are crowding up wallets with a single application. The application will provide a unique customer identification number in the form of a bard-code that can be scanned by merchants. Currently there is a network of 2000 merchants active with the application. These merchants can also run their own promotions via the app
Sometime earlier this year, the firm also tied up with Foursquare for automatic check-ins when the application is used.
The other investors in the firm are Amplifier Ventures, LaunchCapital, and Acta Wireless.
And what is Verizon's interest? Every operator worth its salt wants to get a piece of the mobile payment pie. However there's loads of competition. On the processing side there's Mastercard and Visa - they have relatively high processing fees but they also have the market coverage which makes their entry easier. Then there are platform and application vendors like Qualcomm, Monitise and a host of others. Finally there are the players at the other end of the spectrum - firms like Nokia, Venyon, Gemalto. And lest we forget - besides all of these names we even have the banks.
Verizon with this move may be hoping to corner the peripheral elements of the wallet. As the coverage of the small and medium merchants increases and they have a deployed and entrenched network, payments should be the next logical step. Hopefully by that time the joint venture with T-Mobile and AT&T may also be rolling full stream ahead (though frankly I doubt that very much - lions and leopards don't work together to go after the impala).
