July 7, 2011
eBay acquired Zong, provider of payments through mobile carrier billing, today for a compensation of an estimated $240 million in cash. Zong uses direct connections with mobile network operators around the world to provide a secure payment solution. Zong is also a mobile payment provider for Facebook Credits and is accepted at over a thousand digital merchant sites. Zong can reach a reported 3.2 billion mobile users through over 250 carrier connections to provide localized payment capabilities in 21 languages and 45 countries.
So, marry Zong’s existing network to eBay’s payments powerhouse in Paypal, and this acquisition should pay for itself relatively quickly while adding to its existing set of mobile payment offerings. Scott Thompson, president of PayPal, verified this assumption by saying:
“We believe that Zong will strengthen this value by helping us reach the more than 4 billion people who have mobile phones, giving them more choice and security when they pay.”
Not to mention Boku, one of Zong’s biggest competitors, is rumored to be in acquisition talks with Apple and Google, but nothing has been confirmed to this point. Still, I wonder if this supplied any sense of urgency to the acquisition of Zong.
Zong raised a total of $27.5 million in venture capital funding from Newbury Ventures, Advent Venture Partners and Matrix Partners, so this acquisition returned approximately 8.7x on their initial investment.
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