Another bout of news is coming from the world of online payments: General Catalyst has announced a new, $10 million initiative — called the GC Stripe Platform Fund — to help its portfolio company, payments startup Stripe, continue to scale up: GC will invest in interesting startups that are powered by Stripe’s network, and startups that are building ways of extending the Stripe network.
Stripe has raised $120 million with investors including Khosla Ventures, Founders Fund and Sequoia, among others. The company says that there are over 1,000 apps today that use Stripe’s payment APIs.
The news completes a hat trick of payments news today that also included eBay announcing its intention to spin off PayPal, and Dwolla raising money from CME Group. It’s timed well in that Stripe has scored some notable wins over PayPal by tying up with Twitter and Facebook and Apple Pay for payment integrations, and shows that the company is working hard to push more scale in its business in the face of a newly-independent PayPal getting more aggressive in the future as well.
GC says that those interested in applying for funding should email a one-page pitch to GC_StripeEcosystem@generalcatalyst.com. It’s considering applicants from all over the world.
Hemant Taneja, MD of General Catalyst Partners, says that Baremetrics is instructive of the kinds of investments GC will be making. “The GC Stripe Platform Initiative is geared primarily toward rapidly accelerating, seed-stage startups who need a capital infusion to sustain their momentum,” he said in an interview. “Most investments will range from $250,000-$500,000.”
This is not the first time that smaller tech startups, or their backers, have run funding initiatives to promote their platforms. Twilio did something similar in Europe in partnership with 500 Startups. And larger companies like Salesforce, Microsoft and Google also make strategic investments.
This is different in that it is a GC managed initiative, with GC investing in the companies. “That said, Stripe may offer unique technical access or mentoring to recipients of investments,” he added. “We think that some of the most innovative companies of the future will be built on Stripe. Their open platform strategy will lead to an entirely new ecosystem of software companies that are focused on helping customers scale online.” It will consider investing more in the startups over time, he says.