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Kiip Takes Its First International Steps, Inks Reward Network Deal With UK’s Yo! Sushi

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Kiip — the San Francisco-based mobile marketing startup that has created a “rewards network” in which users see offers for free goods and services instead of mobile ads — is going international. The company has signed on the UK-based sushi chain, Yo! Sushi, to deliver offers for free food across apps used in the UK that have integrated Kiip’s service.

Although Kiip has had some of its U.S. customers serve ads outside of the U.S., this is the first time a non-U.S. company has signed on for the service, and the first time Kiip is sending out offers in the UK on a localized, London-only basis, to coincide with the fact that there are so many more people (and specifically Americans) in town for the Olympics. In a meeting this past weekend in a little coffee shop in London, CEO and co-founder Brian Wong told me this is just the beginning of many deals like this as Kiip ramps up its growth, on the back of a recent $11 million Series B round of funding.

The expansion comes at a time when Kiip is competing against a number of other companies that also deliver rewards instead of straight advertisements, like Foursquare and Groupon. The space remains wide open, says Wong, and “we have realized that we could become the trusted rewards provider out there.”

If there’s one thing that seems to annoy the otherwise mild-mannered Wong, it’s that Kiip often gets called a mobile advertising network. “We’re about rewards, not ads,” he told me, stretching out the r-word. He thinks ads, in their current state, have some major limits because of issues with usability and effectiveness. “When you see companies jamming ads into small formats, saying ‘let’s just shrink this billboard,’ it just doesn’t work,” he said.

Rather than trying to figure out how best to cram lots of information into a limited space, Kiip has moved the goalposts altogether and focused its use of small real estate directly on something that a customer can use immediately. While there are a number of apps on the market that push offers to users — Groupon and Foursquare being two examples — Kiip’s innovation of putting those rewards directly into apps by way of its network means that its offers go, in Wong’s words, “wherever you are.”

He says that up to now the engagement rates have been very encouraging. So far, Kiip has seen a 22%  redemption reward rate, and 50% of its redeemers come back to Kiip for more. The majority of users, Wong says, are between the ages of 18 and 34, and Kiip sees a relatively equal mix between male and female users, with ads coming in from big names like Disney, Best Buy and Procter & Gamble.

The bigger picture will see Kiip trying to better match up rewards with increasingly relevant apps. Right now, the company is still in early-adopter phase with a lot of the activity focused around gaming — either in the form of actual mobile games or in areas like fitness apps, which have a natural gamification element to them. It is here that the Yo! Sushi brand fits in particularly well — the company has a kind of Japanese-manga-inspired branding that matches well with gaming design.

But down the road, there will be separate micro-networks around areas like female-focused apps and women’s consumer products; car apps and car-related rewards, and so on. And with the increasing push on location-based offers you can see how this, too, will also start to play a more prominent role with Kiip.

Looking ahead, Kiip is planning to announce more brand partnerships in the UK soon, and it is “on the verge” of rolling out its first campaigns in the middle east and Asia Pacific, with Kiip’s London office, led by Eamonn Carey, leading much of that growth.


Kiip Takes Its First International Steps, Inks Reward Network Deal With UK’s Yo! Sushi

Focus Squarely On Europe, Mobile Payments Startup iZettle Gets $31.4M From Greylock, MasterCard & More

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Just days after releasing an API to integrate its payment platform into third-party apps, iZettle, known as the “Square of Europe” for its dongle-based iOS mobile payment system, has even more news: it has just completed a  €25 million ($31.4 million) Series B round of funding as part of its bid to become the biggest mobile payments platform in the region. The round was led by new investors Greylock Partners and Northzone, with participation from others — including the eye-catching news that payment giant MasterCard is now an investor — along with other new backer SEB Private Equity, and previous investors Index Ventures and Creandum.

The funding takes the total investment in the company to $46.7 million, and Jacob de Geer, iZettle’s co-founder and CEO, says it will be used for product development, and to continue to build out its mobile payments service in Europe — currently available in Scandinavia and trialling in the UK. “Our priority is to get the UK fully launched, and then look at other major markets like Spain, Italy, France and Germany to continue building up our transaction volume,” he told TechCrunch in an interview. “We’re not interested in the U.S. They’re doing really well with Square and others.”

Since starting its first services in its home market of Sweden in August 2011, iZettle has picked up 50,000 merchants using its system — a far smaller number than the 2 million milestone revealed yesterday by Square. But iZettle says that potentially there are 20 million merchants in Europe — that’s the number who currently do not take card payments for their services, putting to one side targeting those who already can — who could be using its service to accept card-based payments.

In its focus on Europe, iZettle is going after a market that has yet to be tackled by PayPal’s Here (although it is looking at other payment routes), or Square (which is reportedly looking to enter Europe itself); but that does have others also looking to do more dongle-based mobile payments: they include mPowa, and a Square clone from the Samwer brothers that may be called PayLeven (that would be its third re-branding and the Samwer’s investment vehicle Rocket Internet has so far declined to comment to TechCrunch about what its strategy is in the venture — we’re asking again now).

iZettle is not disclosing its valuation on the back of the funding news today. Square, by comparison, has raised $141 million to date and has a valuation of $4 billion.

Unlike other dongle-based mobile payment services like Square and PayPal’s Here which use a card’s swipe strip for processing, iZettle has focused on transactions (each charged a flat 2.75% commission on MasterCard, Visa and Diners Club; 3.75 for AmEx) using chips embedded in the cards: chips are now ubiquitous in Europe and are considered more tamper-proof than the strips. De Geer believes that will help the company bring on both more merchants and consumers to the service as it looks to take its offering mass market. “Security comes built into that,” he says.

Its unique IP — an interesting mix of software technology with hardware thrown in — is also what has attracted this latest round of investment.

“iZettle is the first and only company to develop an affordable chip-card reader and app for smartphone-based mobile commerce that meets all of the rigorous international security requirements,” Laurel Bowden, Greylock’s partner in London who is joining iZettle’s board of directors, said in a statement. “They’ve proved they’re ready to step up their game in this very complex and competitive industry.”

The fact that iZettle is based around the chip technology, and that it has a firm commitment to becoming the name synonymous with mobile payments in Europe, makes the company also potentially interesting as either a partner, or even an outright acquisition target, for those larger U.S.-based payment companies that are looking for a way of entering a new market.

De Geer says that the company has already even engaged in those kinds of conversations on a casual basis — but he emphasizes that nothing has advanced into more serious negotiations yet. “It’s not something that we’ve been pursuing actively at this point,” he says.

Aside from building its own user footprint and partnering with other, complementary mobile players, there is another direction that iZettle is likely to explore in the future: the idea of linking up its payments services with other parts of the mobile payment ecosystem, which includes services like product discover, customer loyalty programs, and other rewards services: after all it’s a natural progression to take a consumer from one function to the other, and it makes it much more likely that the consumer will complete transactions if you make it as easy as possible for him to do so.

iZettle has an interesting arrangement that could point to its first partner in such a new venture. It actually shares a Stockholm office with Wrapp, the mobile gift card aggregator that recently entered the U.S. market and has similar ambitions to become the default service of its kind across Europe.

“We are very interested in what Wrapp does in terms of gift cards. They are really disrupting with the gift card market, and that’s all they focus on so that makes them a good partner for what we could do,” says de Geer. “At the end of the day, for all of us, it’s all about adding value for our merchants.”


Focus Squarely On Europe, Mobile Payments Startup iZettle Gets $31.4M From Greylock, MasterCard & More

Placecast’s ShopAlerts Platform For Geofenced Offers Hits 10M Active Users

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Mobile advertising company Placecast says that there are now 10 million active users on its ShopAlerts platform.

To be clear, many of those people probably don’t think of themselves as ShopAlerts users, because it’s a white label product — mobile operators and other customers can use the technology to power their own mobile offers programs, using ShopAlerts geofencing to deliver an offer when a customer is near a specific physical location (most likely a store). Still, it’s a sign that the technology is starting to attract significant consumer interest — especially since that 10 million number only counts consumers who have actually opted in to one of the programs and are now receiving alerts.

ShopAlerts partners include Telefonica’s O2, DDR, AT&T, Sprint, and T-Mobile. Advertisers, meanwhile, include The North Face, Starbucks, Loreal, and Subway. CEO Alistair Goodman says he’s starting to see some patterns emerge across the various ShopAlerts campaigns. For example, he says that one of the keys to a successful campaign is to make sure that the offers are unique to the program, so customers know they “couldn’t have gotten them somewhere else.” When asked about differences between geographies (Placecast operates in North America and Europe), Goodman says there aren’t many, but notes that European consumers seem more willing to sign up for more frequent offers.

In addition to sharing the user numbers, Placecast is also announcing two new hires: CFO Will Peppo, formerly CFO of Google-acquired payments company TxVia, and new UK head Westley Gillard, formerly head of business development at Velti. According to Goodman, Peppo’s hire in particular a sign of Placecast’s growing interest in mobile payments — Goodman doesn’t want to build a payments platform of his own, but he does want to integrate ShopAlerts offers with mobile wallet technologies from other companies, and we should expect news on that front soon.


Placecast’s ShopAlerts Platform For Geofenced Offers Hits 10M Active Users

Baby Steps To NFC: PayPal InStore Hits The UK; Juniper Says 1 In 4 To Pay With NFC Phones By 2017

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Yesterday, Gartner presented a picture of a $172-billion mobile payments industry that is still largely based around older technologies like SMS and web-based payments, with newer services like NFC chips playing a very marginal role. Today, Juniper Research paints a more encouraging picture for NFC: It says in a new report that one in four consumers in the U.S. and Western Europe will tap, wave and hover NFC-enabled handsets at points of sale to buy goods by 2017. But it also notes that today the number of transactions made on NFC phones in those regions is less than two percent.

The news comes on the same day that PayPal has started to ramp up its mobile payments push internationally — without NFC. The eBay-owned payments company today began the UK launch of a retail mobile payments app for iOS and Android devices, PayPal InStore. The clothing chains Coast, Oasis, Warehouse, and Karen Millen are the first to sign on.

PayPal InStore is currently not powered by NFC — a user creates barcodes for payments using the app and then these get scanned by the cashier, and then deducted from a users’ PayPal account.

The question is whether the door is open for the app to be upgraded to NFC when the chip technology is more ubiquitous — it would certainly make sense, given that it would speed up use of the service.

PayPal last week expanded its mobile payment services in the U.S. by adding 15 more major retailers to the list of those supporting the payments company. In the UK, the company has a headstart with its branding: as TNW points out its main mobile app broke the 1-million user mark as far back as 2010.

PayPal has been looking at a number of different technologies to enable mobile payments. It has trialled NFC, launched a dongle-based service called Here, and looked at ways of using pin codes and credit cards to complete the payments from users’ PayPal accounts. As for PayPal InStore, the Inquirer notes that Windows and BlackBerry versions are also under development.

Meanwhile, Juniper’s NFC projections, in contrast to Gartner’s, are significantly more optimistic not just about how much NFC will be used, but also about how much money will be generated from NFC.

Juniper’s principal analyst, Windsor Holden, believes that there will be $180 billion in mobile NFC transactions by 2017 — just $8 billion more than Gartner believes will be made in mobile payments overall this year. Gartner says that the total transactional value for all kinds of mobile payments will be $617 billion by 2016.

One area where both analysts seem to agree is on the complexity and challenges in making NFC work. Chief among them is that there are a number of parties involved in enabling payments — mobile operators, handset makers, payment providers, retailers and banks — and as Juniper points out a “single point of contact to take responsibility” will be needed to make these services gain credibility with users.

So far, we’ve seen a lot of efforts, including Google Wallet, the Isis consortium, and several commercial projects in Europe (eg, France Telecom working with Visa) — but no clear leader in NFC emerging out of all of that.


Baby Steps To NFC: PayPal InStore Hits The UK; Juniper Says 1 In 4 To Pay With NFC Phones By 2017

Research: $1.5 Trillion In Mobile Revenues In 2012, U.S. Accounting For 40% Of All Smartphone Sales

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The mobile industry will reel in more than $1.5 trillion in revenues in 2012, with 28 percent of that, $400 billion, attributable to mobile data, according to new research out from analyst Chetan Sharma.

He notes that within the revenues expected for mobile data, non-messaging revenues led by apps, mobile web browsing and streaming media have finally overtaken those of traditional messaging like SMS as smartphone usage continues to grow. Non-messaging, he says, will account for 53 percent of the total: in other words, some $212 billion will come from apps, music and video streaming, games and mobile web browsing.

Still voice is still accounting for a huge part of the value in mobile, and “OTT” services provided by third parties — be they Apple or others — are still only a small piece of the pie:

Sharma’s report also notes in the U.S. smartphones now account for 69 percent of all mobiles sold — the highest rate with the global average at about half that, 32 percent. He notes that some operators are even more bullish than that and expect 90-95 percent of all sales to be smartphones this year (O2 in the UK led that charge last year as you can see in the slides below). In the meantime, the adoption rate will lead the U.S. finally to be able to claim that more than half of all consumers will own smartphones. The U.S. is also, overall, accounting for about 40 percent of all smartphone sales worldwide.

The total worldwide base of mobile subscribers now stands at 6 billion, and while it took 20 years to reach the first billion, the speed at which this has accelerated is pretty remarkable: Sharma notes that it took only 15 months for that number to go from 5 billion to 6 billion.

As you would expect, a lot of the growth now is coming from developing countries but still the numbers are astounding. He notes that together China and India are adding 75 million new subscribers every quarter to the global base, and points out that China alone already has 1 billion mobile subscribers, the first country to reach that milestone, and that India currently has the highest subscriber growth rate.

But India may, at best, be an opportunity for the future rather than today. Sharma points out that India monthly ARPU is an “anemic” $2.50. “Even with a signficant subscriber base, there is going to be a general lack of opportunity in the market for the next couple of years relative to other markets,” he writes.

In contrast, the early adopters of Japan have helped that country remain in the lead for mobile data usage, with some 60 percent of ARPUs attributable to data. And because the U.S. has nearly the same proportion, but is significantly bigger, it is currently leading the world in terms of data revenues as well as overall ARPU revenues.

Still, the tide is turning: A number of emerging nations are now in top 10 mobile nations by subscribers, he says. They include Brazil, India, Russia, Indonesia, Pakistan, Mexico, while Korea, UK, Italy and Germany “have dropped off or slipped in rankings.”

Patents. Although we’ve had a lot of noise about patent acquisitions, purchases and lawsuits around internet and (specifically) social media patents, Sharma points out the mobile continues to lead the field with patent applications, and that mobile companies are filing more in the U.S. than in Europe — on average 1.7 times more. He notes that in the U.S., the biggest patent holders are IBM, Microsoft and Nokia. In Europe they are Alcatel-Lucent, Nokia and Samsung. Nokia also appears in the list for top-three device patent holders, along with Samsung and Sony. And among carriers, AT&T, NTT Docomo and Sprint lead the charge.

That gives pause for thought about what Nokia has and what kind of value the company holds, beyond the cash that has been mentioned several times in the last week as ratings companies continue to downgrade the company.

Full slide deck here:


Research: $1.5 Trillion In Mobile Revenues In 2012, U.S. Accounting For 40% Of All Smartphone Sales