Start-up Q&A: How GoCardless (YC S11) are giving the credit card companies a run for their money

Getting paid can be a nightmare. Whether you’re collecting small sums from your Fantasy Football League or you’re a crafty sort selling mittens online, accepting payments is expensive and time-consuming. Only big companies like British Gas have the luxury of accepting Direct Debits and the alternatives all carry a punitive charge. Until now.

Tom Blomfield, Matt Robinson and Hiroki Takeuchi are three Oxford graduates who defied the odds to get into the Direct Debit niche, jumping regulatory hoops and smashing development challenges to launch a brand new kind of payments business. GoCardless lets any business or individual accept Direct Debits for a 1% transaction fee (to a maximum total – that’s right, maximum – of £2). It’s one of those businesses that are so simple you don’t know how it hasn’t been done before.

MT caught up with Robinson and Blomfield on the day of their public launch to find out how they did it.

Great Q&A about how GoCardless got started disrupting payments with Direct Debits.

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WePay (YC S09) grows revenue 10x in 2011

Online payments platform and PayPal competitor WePay is announcing its growth data for 2011, and revealing details on the startup’s product strategy for 2012. In case you aren’t familiar, WePay is a Y Combinator backed startup that launched in 2009 to take the hassle out of group paying. Unlike some of its competitors, the service was able to dead simple way to collect, manage and spend money for groups.

On WePay, you can create a unique, FDIC insured account for each group. While the account is still associated with your name, but you can keep each group account totally separate from your personal transactions. Group money can essentially be kept separate from any individual accounts you may have. You can also designate specific individuals to have control over accounts.


The company grew nearly ten times in revenue in 2011, and doubled headcount with 20 new employees (the company plans to double employees again this year). WePay also grew revenue generated by its API by 15x in 2011. Partners like GoFundMe, which replaced PayPal with WePay as its primary payment platform, are helping fuel this growth, says the startup.

Crowdtilt (YC W12) Launches To Become The “Kickstarter For Any Group”

A new startup launching today called Crowdtilt is taking a page out of Kickstarter’s book, riffing on “crowdfunding,” but instead choosing to call itself “groupfunding” or a “Kickstarter for groups of friends.”

What does that mean? Well, we all love Kickstarter, but if you’re looking to pool money to throw your friend a birthday party, for example, that ain’t going to happen on Kickstarter. For a good reason, but that doesn’t mean the crowdfunding model can’t work. Thus, Crowdtilt has built a site that makes it simple for groups of friends to organize things to do together, with the specific focus on making it easy for the organizer to collect money from anyone.

How does that work? The site allows you to easily create a campaign, like “Help Hagan get to San Francisco” or “Phish Party Bus in DC,” while specifying how much money is needed for the campaign to actually happen — or in the startup’s lingo — “tilt.” You can then send this campaign out to your friends, who can authorize their credit cards for a certain amount with Crowdtilt.

Like groupbuying, friends’ credit cards won’t be charged until the campaign has tilted, or in other words, the specified amount has been reached. Not dissimilar from Kickstarter in this way, especially as projects have a certain amount of time before they become defunct.

Crowdtilt has turned out to be a huge help even among the YC class itself. The current batch has used crowdtilt successfully to even buy a communal pickup truck!

SendHub (YC W12) public launches today -- Offers simple SMS for businesses, grew 3x in January and 45% this month alone

Y Combinator and Start Fund-backed startup SendHub, which offers a simple SMS solution for businesses, is killing it…and it never “officially” launched. Instead, the company soft-launched a couple of months ago with zero fanfare, and already has several hundred customers, 40% of which are active monthly users, sending some 30,000 SMS text messages per month.

Although generating revenue through its premium services for businesses, SendHub is also making teachers’ lives easier, by providing them with free tools to communicate with students and parents via SMS.

The big draw for SendHub has nothing to do with buzzwords (aren’t you sick of local, social, photo-sharing apps, anyway?), and everything to do with building something people actually need: an affordable, easy-to-use alternative to today’s business-focused messaging platforms. In January, the startup grew its user base by 3x, and so far this month, it’s grown another 45%.


Accel, SV Angel Put $1.5M In Online Bank Payments Platform GoCardless (YC S11)

If you’ve ever set up an automatic ‘Bill Pay’ feature on your bank account to pay off your utility and cable bills, then you’ve taken advantage of a nifty feature called an ‘interbank transfer’, also known as an ‘Automated Clearing House’ payment. Once they’re set up, they tend to be very convenient — the amount of the bill is automatically deducted from your account, saving you the hassle of having to write yet another check (or fill out another online form) each month. Merchants benefit from this system as well, because their fees are significantly lower than those that are charged by the credit card companies.

Thing is, this feature is typically only available for paying bills from big companies — it’s rare to see a smaller online merchant that’s offering these automatic transfers, because the process for them to set it up is complicated and costly. Until now. Y Combinator-backed startup GoCardless is launching today as a UK-based service that allows smaller merchants to easily set up interbank transfers for customers.

Part of Y Combinator’s Summer 2011 class, GoCardless was founded in 2010 by Oxford graduates Hiroki Takeuchi, Tom Blomfield and Matt Robinson. GoCardless is also announcing a $1.5 million round led by Accel Partners, Passion Capital, SV Angel, Start Fund, and Y Combinator. Proceeds will go towards building out the team and product, and expanding the merchant base.

Social Ridesharing Startup Ridejoy (YC S11) Raises $1.3M From Freestyle Capital, Lerer Ventures

Ridejoy, a YC-backed startup that brings people together via ridesharing on long-distance trips, has raised $1.3 million in seed funding led by Freestyle Capital
with Lerer Ventures, Start Fund, SV Angel, Founder Collective, Y Combinator, Ben Ling, Owen Van Natta and Joshua Schachter participating.

The service allows drivers who are already planning to take a roadtrip to ‘sell’ their extra seats to other users. Drivers earn money on trips they were planning on taking anyway, and Ridejoy passengers get a door-to-door lift, in some cases for less than they’d pay for a bus ticket.

Embark NYC is the #1 MTA award-winning best app to reduce your subway headaches

The MTA has spoken: Embark NYC is the app that can best help reduce your subway headaches.

Embark was selected by a panel of 9 judges as the grand prize winner of the MTA App Quest competition. The contest, which was announced in July, challenged developers to use MTA data to help New Yorkers navigate the transit system.

Forty-two apps vied for the honor of best app.

Embark features service advisories and schedules, displays the closest station to your location, and allows you to view service changes by tapping your destination on a map. The app is available for iPhone and Android users. The four-man Embark team also makes transit apps for other cities, including Philadelphia, Boston, and Washington, D.C.


Inside Stripe, The PayPal Competitor Backed By PayPal Founders Peter Thiel, Elon Musk (and YC!)

A great in-depth look at Stripe:

Off of Ramona Street in Palo Alto, down a narrow alcove lined with potted plants and flowers, is a small office hidden by hanging leaves that passersby might confuse for a misplaced country cottage. Inside, Patrick and John Collison, brothers in their early 20s from Limerick, Ireland, are punching away at their keyboards. Crumpled bags of chips are on a nearby table; the hum of a maid's vacuum is heard from another room. This is the humble headquarters of Stripe, a startup with a decidedly not-so-humble mission: to become the next PayPal.

Don't let the implausibility of that mission throw you: Stripe is backed by Sequoia Capital, Andreessen Horowitz, and--how's this for irony--PayPal cofounders Peter Thiel and Elon Musk. A source at Google Checkout recently told me Stripe is one startup the company has definitely had its eye on in the Valley. And Paul Graham has boasted to Fast Company that he believes Stripe is the next big thing. (Y Combinator backed Patrick's first startup, Auctomatic, which he sold for $5 million at the age of 19.)

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