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Carrier billing startup Boku to raise £45M in London IPO November 20

Boku, the startup that partners with Apple in its rollout of carrier billing for the App Store, expects to raise £45 million ($60 million) on a post-money valuation of £125 million ($164 million) when it goes public on November 20, a week f...

, the startup that partners with in its rollout of carrier billing for the App Store, expects to raise £45 million ($60 million) on a post-money valuation of £125 million ($164 million) when it goes public on November 20, a week from today.

The company which also works with Google, , Facebook, Spotify and some 173 carriers to allow users to pay for digital goods like apps and subscriptions via their mobile bills first announced its intention to float on the London Stock Exchanges Alternative Investment Market, on , without detailing the amount it wanted to raise. Since then, we have picked up more details from reliable sources, who also say that the IPO has been oversubscribed.

Of that £45 million, £30 million will be passed back to existing investors, with £15 million going to the company to help it invest in growth, understands, particularly in ramping up operations , as well as linking up more carriers with app stores. The company says it is currently Ebitda positive, with revenues in the last nine months totalling $16.7 million, with Q3 up 44 percent on the same period a year ago.

Those sums may sound relatively modest compared to what you might usually hear when a company debuts on the NYSE or Nasdaq in the U.S.. That is intentional: the aim of AIM is to help smaller startups go public that might fail to catch enough attention on the other side of the pond.

Londons AIM also happens to be where one of s competitors, Bango, is also listed.

, which was founded in San Francisco in 2008, has raised roughly the same amount in VC funding as it will be valued heading into its IPO, pre-float, although different sources conflict on the total amount. According to , it has raised $87 million;  notes the total funding at $105 million. s CEO Jon Prideaux says the number is around $90 million. As of its last round last year, was valued at , according to Funderbeam estimates.

has had an impressive list of investors in its time as a startup, including Andreessen Horowitz, Benchmark, Index Ventures, Khosla, NEA and Telefonica. Sources tell us that most of the companys existing investors plan to remain invested in the startup as it clears the decks to move on as a publicly-traded company.

There comes a time in every companys cap table where successive private rounds lead to more complication and it is just easier to get to a situation where all shares are changed to single class and the balance sheet becomes clean again, said Prideaux in an interview.

The amount raised and the investors involved speak to early hope and interest in the general area of , as have that both and Google were apparently interested in acquiring , or at the least inking a large partnership with it.

The decision to float comes at an interesting time for and carrier billing.

Carrier billing as a concept the idea of using your phones pre-pay credit and/or carrier contract as a way to pay for goods that youre consuming on the phone, like apps or ringtones has been around for years, and was originally developed as a way to help people pay for things more quickly and securely without having to enter their card details regularly over their phones.

In developed markets where people use credit cards, however, carrier billing has been somewhat sidelined, as its function was largely replaced by app store operators themselves operating wallet-style services, where they hold a users card details securely themselves.

But the same does not go for emerging markets. There app store operators have doubled down on carrier billing as a route to expanding their apps businesses in countries where credit /payment card penetration is not as high, and people are already using carrier billing services.

For app store operators, carriers and handset makers, developing economies represent the biggest growth opportunity in general because smartphone adoption has reached saturation point in more mature markets and people are buying new devices less often.

So carrier billing companies have jumped to seize the opportunity on the payments front. On the carrier end, currently integrates with 173 operators in 51 countries, covering some 3.2 billion users in all, and on the content end, it has integrated with the likes of Facebook, Google, , Spotify and Riot Games to enable users of these companies apps, who are also customers of their integrated carriers, to link up the two to pay for things using their phone accounts.

Perhaps most notably, is the company that whose iPhone is known as one of the highest-grossing devices when it comes to generating revenues through apps chose when it finally started to roll out carrier billing. (So maybe, as those rumors in 2010 implied, there was a wide-ranging partnership inked after all.)

was relatively late to the market with the first rollout, in . But since then, has worked with to expand this to some and 50 carriers, with an .

has indirectly credited expansions like this as part of what is fuelling its growth in its apps business today which may have originally started out as a way of bringing more attractive services to its devices to fuel handset purchases but has developed into a business line in its own right.

Services which includes paid apps and in-app purchases and other purchases for iTunes and other virtual goods consumed on the device ( doesnt break out by categories) in the last quarter.

On the App Store, which is very important to us, the number of paying accounts has grown a lot, said Luca Maestri, s CFO, in the last earnings call. Its grown a lot because, as you said, the installed base has grown, but also because we have made a number of changes that have made it easier for our customers around the world to participate on the App Store and be able to transact on the App Store. We are accepting, for example, more forms of payment today than we were 12 months ago or even 6 months ago. So thats been very important.

And to be clear, and are not the only ones capitalising on a new interest in carrier billing. Just today Bango announced that it is expanding its carrier billing expansion in , which now can also be used to , representing a large jump on average transaction sizes.

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CHARLES MILANDER

Charles Milander is a leading Expert in Technology and Social Media. He has been a Contributing Correspondent for CNN Expansion Mercado and Newspaper Listin Diario, TV Producer, Anchor and host for Univision Radio, Telemundo47, Color Vision. He Designs Software Architecture, Internet Technologies, Network marketing, Product Development.


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