Mobile-payment initiatives from Google Inc., Isis and PayPal Inc. appear to be motivating investment firms to take a closer look at the companies that will help enable such transactions at brick-and-mortar locations.
Vivotech Inc., a Near Field Communication software and systems company, is one such business. The Santa Clara, Calif.-based company just completed a new round of financing that included $24 million in funding and added three new investors (
The funds put Vivotech in a better position to expand its presence in more than 35 countries, company CEO Mick Mullagh told PaymentsSource in an interview.
“This is a very positive indication that some major players on a global basis support Vivotech’s mission, which is to enable the next generation of payments and shopping in NFC-enabled mobile commerce,” Mullagh said.
Vivotech is clearly seeing increased demand for its services in the NFC market, Richard Ogelsby, senior analyst for Boston-based Aite Group, said in an interview with PaymentsSource.
“This funding will obviously help them meet that demand,” he said.
The round of fund-raising attracted new global investors in Singapore’s Economic Development Board and Singapore-based SingTel Innov8 Pte. Ltd. Schaumburg, Ill.-based Motorola Solutions Venture Capital is the other new investor.
Vivotech has managed to create a “mini NFC ecosystem” on a global scale, Mullagh said.
“We think this is a sign of confidence in the [mobile-payments] market and our ability to execute our strategy in this market,” he added.
That strategy relies more on point-of-sale applications within than the actual devices, Mullagh said.
Indeed, industry observers expect POS systems to feature software that will improve such areas as discounts, coupons and loyalty-point systems.
Vivotech is aware such consumer perks associated with NFC mobile payments will only expand the market and put the company in a better position going forward, Mullagh said.
The merchant and consumer benefits such perks bring will “spur growth in the market, which in turn spurs growth in Vivotech, which in turn spurs growth in current investors and helps bring new investors in,” Mullagh said.
Motorola agrees with that mantra, which is why the company views Vivotech as an integral part of its own plans.
Motorala’s investment strategy is to identify technology companies “that can augment or enhance our internally developed solutions,” Tony Palcheck, managing director of Motorola Solutions Venture Capital, told PaymentsSource in an email.
“We believe our investment in Vivotech is a part of making sure that Motorola Solutions is positioned to provide our customers with the best technology for their present and future needs,” Palcheck wrote.
Motorola is just one of many current companies and fledging mobile schemes Vivotech is dabbling in.
Vivotech has partnered with Google in its efforts to launch a mobile wallet (
“There are very big players involved in the space right now,” Aite’s Ogelsby said. “Google is a well-funded player participating in this market and that certainly has to help Vivotech a lot in their ability to raise funds.”
Mullagh anticipates Vivotech’s future revenue gains will come from POS application development. “We see our revenues starting to double as this market grows quickly,” he said.
Whether that leads Vivotech to become a public company remains to be seen. The company has not addressed the issue much publicly, though rumors indicate it is a possibility in the near future.
“It’s early yet,” Mullagh said about an initial public offering. “Let’s wait for the market to be big in mass and for Vivotech to achieve the growth we believe is there.”
In the next 12 to 18 months, Vivotech “should be growing fast, profitable, which at that stage many options will be open to us as a company,” Mullagh said
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