ingogo, the Australian mobile payment platform, has raised an additional $9.1 million in a pre-IPO funding round which will be used to expand out of the taxi business.
This takes the total capital raised by the taxi app company to $16.2 million and values the business at more than $45 million.
The local cash will allow ingogo to launch a mobile payment platform in partnership with cloud accounting software Xero.
The partnership with Xero will allow small business owners, such as tradesmen, direct sales people and small product enterprises, to process payments immediately from customers on site using Bluetooth technology connecting ingogo’s app to a very small portable payment terminal.
The beta for the Xero payment integration will be launched by the end of October with a full commercial version set to launch in early 2015.
The funding injection will also help the company prepare for an intended listing on the ASX in the first half of 2015.
Led by UBS and Canaccord Genuity, the funding round brings new investors including Craig Winkler, co-Founder MYOB and a significant investor in Xero, and Chris Lee, co-founder of MYOB, Melbourne Family offices, Pitt Capital, John Ho (Janchor Partners an Asian equity focused hedge fund) and a number of Australian and Asian Institutional Funds.
The round is also the first deal for VentureCrowd, the equity-based crowd-funding platform powered by Artesian Venture Partners, which is contributing $1.2 million from almost 50 pre-qualified individual investors.
Investor Craig Winkler says: “Payment systems are often complex and expensive. By proving their system in one of the hardest environments around (in taxis), ingogo now have a great offering to make life easier for small-medium business owners. That’s worth cheering.”
Ingogo launched the world’s first app-based payment platform in October 2013, providing wireless terminals in taxis to process payments from multiple sources including eftpos and credit cards.
Founder and managing director of ingogo, Hamish Petrie, says the company is extremely well placed to accelerate extension of ingogo beyond the taxi industry.
“We will be making it easier for businesses to not only improve their cash flow, but streamline their processes and simplify their accounting workflow,” he says
“We’ve found a gap in the market. There are business out there who have found it cost prohibitive to run traditional payment terminals, such as trades and other mobile services.
“But soon, they will be able to benefit by automating their accounting work with our Xero integrated system. It’s an area banks don’t service well.”
Based on the past month’s trading, ingogo is processing an annual equivalent of more than $100 million in taxi payments. Petrie says this was around 10% of the incumbent Cabcharge’s payment volume annually.
“We’re taking a decent chunk away from Cabcharge’s payment turnover and are now at least 10% of theirs and growing. We are set to process well in excess of $150 million in the next year,” Petrie says.