Dana Stadler, former PayPal SVP and current Zong investor (Source: Matrix Partners)
Former PayPal executive leads the charge against his former company
Dana Stalder joined PayPal in 2003, just after the 2002 eBay acquisition. Working as SVP of product sales, marketing, and technology he helped guide PayPal in a campaign of market domination. EBay won big as PayPal became its most profitable unit, by far. And Stalder was handsomely compensated with millions in rewards.
Now he's betting a bunch of his PayPal fortune on a new startup called Zong, which looks to beat PayPal at its own game.
Zong started as a company that supports secure online payments in Facebook games. Eighteen months ago Stalder joined Matrix Partners. Together with his new venture capital partners he recently pledged $15M USD in financing, much of it from Stalder's own PayPal fortune, for Zong.
The money could be used to propel Zong to be a true competitor to PayPal, particularly in the emerging mobile payment markets. Zong currently has partnerships with 174 mobile carriers, that cover 1.5 billion customers. While Zong obviously won't be reaching all of those customers, if it can merely reach a fraction, it stands to be one of America's hottest tech startups.
Stalder prefers that Zong isn't referred to as a "PayPal killer". In a statement Zong comments, "Zong has no aspirations to kill PayPal nor is that the thesis for the investment that was made by Matrix Partners. We, in fact, consider Zong to be a complementary alternate payment option to bank cards and PayPal, and is by no means a replacement. We do feel that Zong is on a path to build an industry leading payment platform that has significant scale. The company is a category leader in mobile payments and is solving real consumer and merchant needs, offering an alternative that addresses different payment behaviors, use cases and demographics."
Part of why Stalder may be hesitant to contrast PayPal and Zong is that the companies could become involved. There is speculation that PayPal may preemptively try to acquire Zong, or enter a major partnership with the mobile payment provider. PayPal currently has not extensively developed mobile offerings.
Whether a PayPal tieup or a path of independent growth lies in store, though, Zong indeed seems a promising future star. As more browsing transfers to mobile internet devices and smart phones, Zong and Stalder may find themselves in a very sweet spot.
"If you can find a PS3 anywhere in North America that's been on shelves for more than five minutes, I'll give you 1,200 bucks for it." -- SCEA President Jack Tretton
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