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Notes On A Payments Startup On The Rise

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Venmo: A Payments Startup on the Rise

MSIN7008 Individual Coursework

Prof. Dave Chapman and Philip Treleaven

23 March 2015

Table of Contents

I. Introduction……………………………………………………………..1 1. Overview
2. Venmo’s Story
3. Venmo Today
II. Documenting the Business Model………………………………………………………..2
III. Macro Market and Industry Analyses…………………………………………………….3 1. New Business Road Test and Customer Analysis 2. Team Domain Analysis and Critical Success Factors 3. Competitor and Entry Barrier Analysis
IV. SWOT Analysis……………………………………………………………..……………4
V. Reflection: The Bottom Line……………………………………………..………………5 1. Venmo’s Future
Bibliography…………………………………………………………..…………………6

I. Introduction

1. Overview
Founded in New York
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They both thought, “Why are we still writing checks? Why aren’t we using a web service to pay each other back?”

It all started out with the idea of simple text message-based payments, but Andrew and Igram quickly realized the immense potential of mobile apps. After being bootstrapped on $100,000 in 2009, Venmo was publicly launched in March 2012.

Figure 1: Iqram Magdon-Ismail and Andrew Kortina, co-founders at Venmo.

Venmo’s innovative idea, clean and fast design, and integration with social media engaged its mostly young adult and college-aged users as the startup grew exponentially. It raised $1.2 million in seed funding in May 2010 from NYC-based venture capital companies Betaworks, Founder Collective, and Lerer Hippeau Ventures in NYC. According to TechCrunch, it also attracted the attention of angel investors in San Francisco, such as Dave Morin, Dustin Moskovitz, and Sam Lessin.

As Venmo became more popular and generated media attention, it continued to raise money. In August 2011, it raised an undisclosed amount of Series A funding from Accel Partners in Palo Alto, and Greycroft Partners and RRE Ventures in NYC.

3. Venmo Today

Figure 2: The growing Venmo team

Today, Venmo is headquartered in San Francisco and has close to one hundred employees. It has stayed true to its promise of always being a free app,
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