Fortumo Raises ~$10M From Intel Capital, Greycroft To Take On Bango And More In Carrier Billing; Inks Deals With China Mobile And Vodafone

Fortumo — a specialist in mobile carrier billing, which lets users to pay for apps and goods in apps without coughing up credit card numbers — is today raising its game a bit against competitors like Bango (partner to Facebook, Amazon and more), Boku and PayPal’s Zong — the Estonian-hatched startup has announced a new growth round — which TechCrunch understands to be in the region of $10 million — led by Intel Capital and Greycroft Partners. At the same time, to push its business in emerging markets, it also announced two new carrier deals, with China Mobile and Vodafone.

In addition to the two new carrier partners, Fortumo says it integrates with 300 carriers across more than 80 countries, along with over 81,000 developers. Those include long-standing agreements to provide carrier billing services to Angry Birds maker Rovio, Pop Cap Games and Badoo, and it also powers the in-app payments for Windows 8 apps. It’s an area that is still relatively nascent compared to other payments like cards in developing markets, but it is growing. All together, worldwide gross transaction volumes for mobile payments for digital goods is expected to more than double by 2015 to $268 billion, Fortumo notes.

The terms of the new investment were not disclosed publicly, but we understand from a source close to the matter that it is similar in size to the $10.2 million raised by Bango a couple of weeks ago. Meanwhile, the two carrier deals mean that Fortumo is now working with two of the largest mobile operators in the developing world, with China Mobile leading the market in its home country, and the Vodafone agreement covering 13 countries: UK, Germany, Italy, Spain, Portugal, Netherlands, Ireland, Hungary, Romania, Czech Republic, Greece, Egypt and South Africa. In other words, a mixture of both developed and developing markets.

Prior to this raise, Fortumo was majority-owned by Mobi Solutions, a specialist in SMS-based services (carrier billing services usually use SMS for the backchannel confirmation for payments, so makes sense for them to have developed something like this). In addition to Greycroft and Intel, Mobi Solutions will remain a now-smaller shareholder.

The injection of cash, Fortumo says, will be used to build out its business further, with an emphasis on strategic partnerships and acquisitions in emerging markets in regions like Latin America, Asia, Central Eastern Europe and MENA, according to a spokesperson.

This has been the focus for the company up to now, and that’s part of what attracted the new investment.

“We have been impressed with Fortumo’s strong product focus and ability to execute,” said Dana Settle, a Partner with Greycroft, in a statement. “What sets Fortumo apart from their competition is their focus on geographies where mobile payments will have the biggest impact and growth over the next few years.”

This is also a big focus for Bango at the moment and was the specific, stated reason for it also raising $10.2 million earlier this month. Emerging markets, as we pointed out at the time, are an important target for carrier billing: credit card penetration is low, so solutions like Apple’s iTunes, which require users to enter card payment details, would get less traction. That presents a bigger opportunity for carriers and content developers to offer carrier billing services as a way of getting a bigger cut of transaction action, and also to help encourage purchasing on mobile devices.

There is a key difference, however, between Fortumo and Bango — which reported a loss of $3.8 million in the nine months that ended December 31, 2012. Fortumo is, a spokesperson says, “basically the only mobile payment provider who has been profitable and is profitable.” The company says that has been the case since 2009 — although as it now sets its sights on ramping up its services, it will be interesting to see whether it can remain in the black or whether it will push itself out of profitability in a gamble for more growth.

Release below.

Fortumo adds Intel Capital and Greycroft Partners as Investors in the Growth Round

Fortumo to expand direct mobile billing in emerging markets and on new platforms.

February 21, 2013 – Fortumo, a mobile payments company with offices in Estonia, San Francisco and Beijing, announced today that Intel Capital and Greycroft Partners will be new investors in a growth round of financing. Prior to the funding, Fortumo has been majority-owned by Mobi Solutions, an Estonian mobile solutions company, which will remain a shareholder. The funding will be used to further strengthen Fortumo’s position as the go-to provider for mobile payments in emerging markets.


“The opportunity in the mobile payments segment is enormous, and we believe that Fortumo is well positioned to capitalize on the trend of operator based billing, says Marcin Hejka, Managing Director of Intel Capital Eastern Europe, Middle East and Africa. “The Fortumo team is a great example for the strong talent in the Central and Eastern European region able to build innovative and globally successful solutions. ”


Fortumo is also announcing new direct contracts with two of the largest telecommunications groups in the world: Vodafone Group for direct operator billing in 13 countries and with China Mobile.  Fortumo has also recently added Gameloft, Vostu and Cut the Rope game-maker Zeptolab to its growing list of blue chip merchants, which already includes Rovio (publisher of the Angry Birds line of games) Badoo, and others. Recently, Fortumo has partnered with Microsoft to promote it’s in-app payments solution for Windows 8.


“We have been impressed with Fortumo’s strong product focus and ability to execute,” says Dana Settle, a Partner with Greycroft. “What sets Fortumo apart from their competition is their focus on geographies where mobile payments will have the biggest impact and growth over the next few years.” Worldwide gross transaction volume for mobile payments for digital goods is expected to more than double by 2015 to $268 billion.


“Fortumo is a fast-growing, profitable company with a global footprint and strong management team,” says Klaus Konrad, Investment Director of Intel Capital. “We’re excited about being part of Fortumo’s strategy of bringing seamless mobile payments to more users, merchants, and mobile operators worldwide.”


Fortumo’s system works via direct carrier billing. Customers pay for digital goods via their mobile billing plans with their mobile operators rather than cash, credit cards, or debt cards. Carrier billing is a strong alternative to credit cards for purchasing virtual and digital goods. Fortumo features payment connectivity with over 300 mobile operators in 80 countries, including a number of exclusive direct carrier billing partnerships. Mobile billing is available for over four billion mobile users worldwide without a need to register or have a credit card.


“Our competitors in the mobile payments space have focused mostly on the US and on Western Europe,” says Rain Rannu, co-founder and CEO of Fortumo. “While Fortumo covers these regions well, what differentiates us is our strong emphasis on emerging and growth markets where credit card penetration may be low but mobile usage is very high. Working with Intel Capital and Greycroft will help us to pursue additional growth opportunities, including strategic partnerships and acquisitions.”


Fortumo is the only carrier billing company to operate on a self-service concept, allowing any merchant to sign up via the Fortumo Web site and to start accepting mobile payments. Fortumo’s payments system is optimized for all key platforms, including Web, mobile web, HTML5, and in-app purchases on both smartphones and tablet devices. Fortumo has been profitable since 2009 and has added over 72,000 registered merchants, including several of the world’s largest gaming companies and content publishers, over the past 5 years.


About Intel Capital

Intel Capital, Intel’s global investment and M&A organization, makes equity investments in innovative technology start-ups and companies worldwide. Intel Capital invests in a broad range of companies offering hardware, software, and services targeting enterprise, mobility, health, consumer Internet, digital media and semiconductor manufacturing. Since 1991, Intel Capital has invested more than US$10.8 billion in over 1,276 companies in 54 countries. In that timeframe, 201 portfolio companies have gone public on various exchanges around the world and 317 were acquired or participated in a merger. In 2012, Intel Capital invested US$352 million in 150 investments with approximately 57 percent of funds invested outside North America. For more information on Intel Capital and its differentiated advantages, visit or follow @Intelcapital.


About Greycroft Partners

Greycroft Partners is a leading early stage venture capital firm focused on investments in digital media. With offices in the two media capitals of the world – New York and Los Angeles – Greycroft is uniquely positioned to serve entrepreneurs who have chosen us as their partners. We leverage our extensive network of media and technology industry connections to help our entrepreneurs gain visibility, build strategic relationships, successfully bring their products to market, and build successful businesses. Greycroft manages $400MM and has made over seventy investments in leading companies including Huffington Post, Paid Content, Buddy Media, Glam Media, Trunk Club, M5 Networks, Maker Studios, Viddy, Babble, Collective Media, Pulse, and Klout.  For more information please visit the Greycroft Partners website at


About Fortumo

Fortumo, founded in 2007, is the most developer-friendly mobile payments provider, enabling app and game developers to easily monetize their users through carrier billing. Fortumo has payment connectivity to over 300 mobile operators in 80 countries, including a number of exclusive direct carrier billing partnerships. With unique features like self-service signup and seamless UI, Fortumo’s mobile billing technology is used by some of the most awesome online and mobile publishers. Fortumo is headquartered in Estonia and has offices in San Francisco and Beijing. For more information and signing up, visit: