Clinkle raises $25 million to kill SquareJune 27, 2013: 10:01 AM ET
Clinkle raises $25 million from big-name backers, with plans to disrupt the mobile payment space.
FORTUNE -- Lucas Duplan demurs when I ask if his mobile payment startup, Clinkle, is intended to be a Square-killer.
"I don't view this as a zero-sum game, and am appreciative of all the people trying to innovate here, including Square," he says. "We're just looking to build the best possible product to delight our users... but obviously there will be impact felt throughout the industry if we succeed."
Apparently Stanford University's computer science program has a few electives in political science. So I'll say it for him: Duplan wants to destroy companies like Square by leap-frogging their reliance on proprietary merchant-side hardware -- transforming the entire payment space into one that requires nothing more than phones or tablets. No more credit card machines or mobile device plug-ins. Just the same free app downloaded by both the buyer and seller.
It's a big vision, which is why Clinkle today is announcing $25 million in seed funding from some very big names.
Accel Partners led the round, with Accel partner Jim Breyer also making a personal investment. Other participants include Andreessen Horowitz, Peter Thiel, Intuit (INTU), VMWare co-founders Diane Greene and Mendel Rosenblum, Marc Benioff, Regis McKenna, Andrew Viterbi, Owen Van Natta and a whole bunch of Duplan's former Stanford professors.
Accel is a particularly interesting lead, given that it was the first institutional money into Facebook Inc. (FB) -- the company whose early rollout strategy Clinkle hopes to mimic. Duplan's plan is to make the app ubiquitous in college communities -- among both students and merchants -- and then expand from there.
"If your mission is to convince hundreds of thousands of different merchants to take this, it will take too long," he explains. "You have to short-circuit the adoption. When you study how networks get formed, it almost always comes down to closed tight-knit communities, replicating the process and eventually connecting them."
Accel's Breyer was originally a bit skeptical when introduced to the company by Diane Greene -- particularly about what happens when students go home for break or graduate -- but got more comfortable after meeting with student groups at both Stanford and Harvard (where he sits the Harvard Corp. board). What he learned was that the general idea of a seamless payment system was appealing to the students, and that many of their hometowns either were, or were close to, other college communities. It also helped that Clinkle plans to offer incentives that are more relevant to their target audience, than traditional credit card perks like frequent flier miles. Also worth noting that Breyer was not only a longtime Facebook board member, but also was a director with Wal-Mart Stores (WMT).
The $25 million is expected to take Clinkle past initial roll-out this fall, and help it build out all of the relevant security and compliance features. Duplan is not yet providing too many specifics of how the app actually works, but the high-profile investors clearly saw something unique.
"Our goal is to provide an experience that can let people replace their physical cash and physical credit cards, not to just to enable merchants to take cards," Duplan says. "Right now if I challenged you to download every payment app and leave your wallet at home, you'd be hard-pressed to compete with cash and credit cards," Duplan says. "We want to help people do that, not just make it easier for merchants to take cards."
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