PayPal competitor Revolution Money gets $42 million investments

06 April 2009

Revolution Money, an online payment firm backed by AOL co-founder Steve Case, said on Monday it has received funding of $42 million from a group that includes a Goldman Sachs affiliate and earlier investors Citigroup and Morgan Stanley. Other investors in this Series C funding were from Case himself, David Pottruck, former CEO of Charles Schwab and David Golden, former vice president of JPMorgan Chase.

Revolution Money, part of Washington-based Revolution LLC, competes with EBay Inc's PayPal service in peer-to-peer money transfers, and offers a credit card.

The company will use the money to beef up its technology and help retailers promote the credit card, with a view to reaching 3 million retailers by 2011 despite tumbling US retail sales, said chairman Ted Leonsis.

"We see more rapid adoption of our service as merchants fight in this economy for more margin from sales," said Leonsis, who owns the National Hockey League's Washington Capitals.

''It's a vote of confidence from the insiders and we were able to bring in this affiliate of Goldman [a new investor],'' Leonsis said. ''It's such a big opportunity and big play. There hasn't been a new entrant since PayPal, which was about a dozen years ago.''

Revolution Money's Internet-based, proprietary RevolutionCard Network supports two products: RevolutionCard and RevolutionMoneyExchange.