Originally posted on Storm website June 28, 2012.
Storm has been a long time investor in the mobile space dating back to when we founded the firm in 2000. The most notable early investment was Airespace, which was started by Storm in 2001 and acquired in 2005 by Cisco for $450 million. We have also made some investments that have been more challenging pre iPhone and it feels like we have been through another industrial revolution, before and after the advent of the iPhone in 2007, and the AppStore in 2008 (which today boasts over 550,000 apps and more than 25 billion downloads). There are nearly 6 billion mobile cellular subscriptions (5 times that of fixed lines). There are more iPhones sold per day (402K) than people born in the World per day (300K). We identified the mobile opportunity early on early on and have continued to invest in and surf this powerful wave.
As a result of the mobile tsunami described above, the mobile payments space has heated and finally had a breakout in 2011. The large notable online incumbents Google, PayPal and Intuit are all battling for control of the mobile wallet, and how payments are made at POS (point-of-sale), stirring folks like Amex, MasterCard and Visa to protect their turf. According to GigaOm, there were 81.3 million people worldwide using their mobile device to make payments (including in-app payments, mobile ticketing and mobile coupons) in 2009. By the end of 2014, this is forecasted to rise to nearly 490 million (a six fold increase but still only 8 percent of mobile subscribers). While it’s still early, mobile payments are going to be the next big thing as the world moves to mobile computing devices as primary platforms. The most notable company to capitalize on this trend has been Square until Flint Mobile .
Social media and networking has had its own meteoric rise in the last 5 years. The statistics are pretty interesting (I think) and Social Skinny has a good summary. Today there are more than 845 million active Facebook users, and 2.8 billion social media profiles. On average in one year, we will share 415 pieces of content on Facebook, we’ll spend an average of about 23 minutes a day on Twitter, tweeting a total of around 15,795 tweets, we’ll check in 563 times on Foursquare, upload 196 hours of video on YouTube, and send countless emails. The impact on business is pretty clear: 38% of CEOs label social media a high priority and 57% of businesses plan to hike their social media spend in 2012; one in three small businesses are now using social media.
These three big trends set the stage for Flint Mobile, which sits at the intersection of mobile, payments, and social media. Flint Mobile’s value proposition is based on elegant simplicity: Allow mobile micro and small merchants to accept payments on any mobile device from their customers while building a valued relationship with them. No friction on boarding a merchant, no friction in accepting a payment, no friction in customer relationship management. And with a fee structure that is competitive with market pricing.
How does it work? Flint has developed an app along with core scanning technology that allows any mobile device to detect and read the digits of any plastic card (debit or credit). This information is encrypted and along with expiration and card verification code allows a secure payment transaction to take place. No dongles or triangles or other devices are required, just your phone. The customer receives an email verification and receipt with an opportunity to provide feedback or share the product or service experience. The merchant is able to track customer transactions, satisfaction and sentiment via a Flint Mobile hosted website tailored to the merchants business. This becomes a powerful tool for on going customer development, marketing and financial management.
Flint Mobile is an example of a company that has been able to create a unique value proposition as a result of advances in technology and broad mobile adoption and application use. None of this would have been possible five years ago.
We are excited about the opportunity that Flint Mobile has of bringing this value proposition to an audience of more than twenty million mobile micro and small merchants in the US alone. We will be working with our friends at True Ventures to make it a success. Welcome to the Storm family!