Clinkle a Clunker? (Sept. 25, 2014)
After three years in “stealth mode”—and $30 million in venture funding—once-hot mobile payments startup Clinkle has finally launched, but with a drastically scaled back platform. Founded in 2011 by then-Stanford student Lucas Duplan, Clinkle generated lots of buzz last year, when the company raised $25 million from a group of investors that included boldface names like Andreessen Horowitz, Intel Capital and Intuit Inc. At the time, the company’s platform was billed as a possible game changer for mobile payments, using high-frequency sound waves to transfer funds between mobile devices and computers, including existing POS terminals.
Clinkle made another splash in October, hiring former Netflix CFO Barry McCarthy as its COO. But by year-end, warning signs began to emerge with the announcement that the company was shedding 16 employees—a quarter of its staff. In the wake of Apple’s unveiling of its Apple Pay service earlier this month, Duplan told Business Insider that Clinkle had pivoted from its original model, opting to “focus our product around consumer engagement, not the hardware layer of storing payment instruments.”
That product finally launched this week, with more modest functionality than originally planned. Instead of mobile POS payments via sound waves, Clinkle appears to be essentially a prepaid debit card program linked to a rewards platform. Users download the free Clinkle app via the App Store or Google Play, then sign up for a Clinkle prepaid Visa card, which can be loaded via bank transfer or cash. When funds on the card are spent, users earn “Treats,” which can be redeemed for refunds on past purchases. Treats also can be sent to friends, who redeem them by swiping their own Clinkle cards. The app also features a budgeting tool and a P2P money transfer function. For now, Clinkle only is available at “select colleges,” according to the company.
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