Dwolla, the Des Moine, Iowa-based start up that is bidding to build a competing digital payments network to match PayPal, Visa and MasterCard, has raised $5 million in a series B funding round led by Union Square ventures.
In just over a year since securing its first $1 million funding round, Dwolla now claims to have recruited more than 80,000 users and 7,500 merchant accounts. The startup, which charges 25 cents per transaction of $10 or more and is free for transactions less than that, now moves up to $50 million a month across its network.
The latest round brings a diversity of talents to the table, including Albert Wenger and Fred Wilson of Union Square Ventures, Matt Harris of Village Ventures, Mark Ecko of Artists & Instigators, Thrive Capital's Joshua Kushner, and angel investor Paige Craig.
Dwolla founder Ben Milne, who started the company after becoming frustrated at the amount of fees he was paying in credit card charges, says the new investors will help the company grow by bringing experience in building consumer brands, social and financial networks, banking back-ends, and APIs.
In setting out his long-term goals, Milne is nothing if ambitious. "A company of ten doing a million dollars a day in transactions is interesting, but it's not what we set out to build," he says. "We set out to build an ubiquitous cash-based payment network that allows anyone with an Internet connection to access their money and buy the things they want in a way that bypasses the costs of the current system."