Check Inc., the mobile finance startup formerly called Pageonce, raised $24 million to bolster its payment application and partner with more billers.
The financing round, led by Menlo Ventures, brings Check’s total funding to $49 million. Check is pursuing a $20 billion market for bill-payment services in the U.S, and aiming to strike deals with services like utilities and phone companies, said Chief Executive Officer Guy Goldstein.
“We want to double down on that business,” said Goldstein, who co-founded the Palo Alto, California-based company in 2007. “The opportunity is huge, and we are building a big company that’ll go public in the future.”
Check is among a growing number of companies trying to disrupt the market for managing and paying bills online by simplifying the process and focusing on mobile. Other challengers include Doxo Inc., Pitney Bowes Inc.’s Volly, Zumbox Inc. and Intuit Inc.’s Mint.com.
Check offers a free smartphone app that lets consumers pay bills, get reminders when payments are due and monitor accounts. The startup has tested a paid consumer offering, charging $5 a month for the bill-pay app and then changing it to 30 cents per transaction, before abandoning the fee and giving the service away.
The company now makes money by collecting a per-transaction fee from billers like wireless carrier Alltel Corp. and water providers Desert Water Agency and Irvine Ranch Water District. Check also generates revenue by charging consumers for extra services such as same-day delivery of late payments.
While the majority of U.S. households with Internet access pay bills through websites, growth in the industry has stagnated, said Mark Schwanhausser, a director at San Francisco-based Javelin Strategy & Research. The new investment could help Check pull ahead in a market where the dominant products haven’t evolved much of late, Schwanhausser said.
“It feels old,” he said. “It needs to be reinvigorated and reworked.”
Check doesn’t disclose its sales, and is not profitable, Goldstein said. User growth is picking up though. Check is processing more than $500 million of payment volume annually and has almost 10 million customers.
“They’ve done a really nice job of making it really easy to use,” said Doug Carlisle, a managing director at Menlo Ventures in Menlo Park, California. “They’ve gotten very nice momentum.”
The funding round included participation from Morgenthaler Ventures and Pitango Venture Capital.