PayPal, Venrock Incubate BillFloat To Develop Innovative Payment Services

We got a tip recently about a startup called BillFloat, which sports a rather limited website with nothing but a logo and a call for fresh engineers. The intriguing thing about BillFloat, however, was this sentence on the placeholder website: “We are a PayPal and Venrock backed startup re-defining a $100 billion market and are looking for Rails engineers.”

Since PayPal doesn’t have a particularly noteworthy track record of funding other companies, we asked the company about said investment, and got the following response:

PayPal did provide some seed money to billfloat, but we’re not disclosing any specifics. This is in line with what Naveed Anwar and Osama Bedier talked about at our developer conference in November … to encourage developers through guidance and resources to build innovative payment applications. Developers have the opportunity to secure support from PayPal and VC partners including seed funding, coaching, market insight and strategy. We also announced a developer challenge and a VC Network.

Digging a bit deeper, we found out that BillFloat was founded by two Entrepreneurs-In-Residence from VC firm Venrock (also called The Quarry team): serial entrepreneur Ryan Gilbert and former Yahoo exec Sean O’ Malley.

Gilbert, for one, knows his way around the digital payment market. He was co-founder and CEO of PropertyBridge, which was acquired by MoneyGram for $28 million in cash back in October 2007. He is also an advisor to Twitter co-founder Jack Dorsey‘s latest startup, Square, which aims to revolutionize card payments on mobile phones.

I had a chat with Gilbert about BillFloat yesterday, in which I learned more about the company and its plans in the payment services space. Turns out BillFloat is not exactly meant to become a stand-alone company, product or service, but rather to function as an incubator for the development of multiple electronic payment ideas he, O’Malley and some people from PayPal have been chewing on for a while.

Here are some of things he said (paraphrased):

I’m excited by the opportunity to do something big in payments – to change the way consumers and businesses transaction. So at “BillFloat” we’re investigating new payment ideas, developing them, testing and softly launching in market in a couple of months. We are building our own products for launch under a brand that we will own; BillFloat is just a working name.

This all sounds rather vague, but Gilbert stressed that they have a clear road map ahead and that they aim to shake up the digital payments space, which he claims no one has done in a big way since the birth and rapid rise of PayPal over a decade ago. The basic idea behind BillFloat is to develop solutions that can payments easier for everyone, whether on the Web, mobile or interactive voice response platforms. We’re all for that.

We’ll be keeping a close eye on this one.

(Thanks to Judd Daniel for the tip)