By Allan Maurer
ST. PETERSBURG, FL—Revolution Money, the Internet payment processing company launched by former AOL co-founder Steve Case and chaired by Ted Leonsis, has raised an additional $15, 225,000 of a $20 million offering, according to a regulatory filing. The company closed a $42 million C round led by a Goldman Sachs affiliate in April.
Brad Burns of Revolution money confirmed that this is new money. According to the filing with the U.S. Securities and Exchange Commission, in addition to cash paid to Revolution Money for its securities, the filing also reports securities issued in exchange for equity in Revolution Money’s parent company, Revolution, in connection with the merger of the two.
The filing states the current round is targeted at $20 million.
Revolution Money is one of TechJournal South’s Tech 50 companies to watch in 2009.
The company raised a $50 million second round led by CitiGroup in 2007. Morgan Stanley and Deutsche Bank AG are also previous investors. Case, Leonsis, David Pottruck and David Golden are also investors. Prior to the latest funding, the Wall Street Journal cited Case as the largest shareholder, followed by CityGroup and Leonsis.
Other investors include Morgan Stanley and Deutche Bank.
Jason Hogg is president and CEO. Hogg was previously a founder of MBNA Canada and chief business development officer at MBNA Canada. He was the COO of Medsite, Inc. and previously President of HorizonLive. Hogg is the son of Russell Hogg, the former president and CEO of MasterCard International Inc.
Leveraging the Internet, Revolution Money reduces costs to merchants for accepting credit cards by up to 75 percent. The company hopes to grab market share from traditional credit card companies and online payment services such as Paypal.
Revolution Money works with both banks and merchants to create marketing programs that encourage consumers to apply for and use RevolutionCard branded credit card and stored value card products.
As RevolutionCard helps merchants save money on payment acceptance costs, merchants partner with Revolution Money to create unique rewards, instant discounts and loyalty offers for consumers that use a RevolutionCard branded card in their stores or on their website.
The company’s RevolutionCard charges no interchange fees and a half-percent processing fee compared to the 1.4 percent to 4 percent fees charged by traditional credit card companies.
The company says its technology enables account holders to do things that no single alternative has been able to do before—fuse the expected functions of a traditional offline credit card with a stored value card, and combine it with new online functionality.
RevolutionCard is accepted at more than 650,000 merchants and at 85 percent of ATMs in the U.S., the company says.
Some merchants reflect the lower processing fees in lower costs to the consumer.
Retailers participating include Barnes & Noble, Bed, Bath & Beyond, Blooomingdale’s, Buy.com, CVS, Kohl’s, Macy’s, Marshall’s, Walgreen’s, Nordstrom, Office Depot, Office Max, T.J. Maxx and Whole Foods.
Online: www.revolutionmoney.com
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