Friendfund, the group payments startup that lets friends club together to make a purchase, has announced an undisclosed round of funding from a group on Angel investors described as, well, friends (I’m not making this up). The investment was led by Bjoern von Siemens in partnership with Linden VC.
However, cheesy PR aside, Friendfund is operating in an increasingly crowded and hot space right now. The Berlin-based startup competes with a host of sites that enable friends and other groups of people to club together to raise money for a purchase or occasion, most of which are probably better funded. These include WePay, The Gifts Project and Giftiki, who have all taken not insignificant investment.
And it’s easy to see why: Group payments are a real phenomenon in the offline world, such as clubbing together for a holiday or somebody’s birthday present, but take quite a lot of organisation and trust to pull off. Move this online and in the age of Facebook and Twitter’s easily exploited social graph and much of the friction can be removed. That’s certainly how Friendfund is pitching its service anyway and I think they are definitely onto something.
Not only can friends easily set up a pool ready to start accepting cash pledges but merchants can also install a Friendfund button to enable group payments to be initiated at the point of purchase. This seems a really smart idea should it take off. And just like Facebook’s ‘Like’ button, the Friendfund button pushes information about the potential group purchase to each participant’s Facebook news feed so that pools can go viral. All of sudden, so-called social commerce seems a tad more viable.