The typical online payment experience has become inflated with friction. And while more companies are building solutions around the online cash register, shortly rethink it from zero. One of these companies is OneText, which builds what it calls a “purchasing text network” which allows buyers to buy purchases by SMS.
The company, founded by former Paypal employees, has just closed a 4.5 million dollars seed tower supported by Khosla Ventures, Cotue, Citu Ventures, Y Combinator, Good Friends (the fund created by the founders of Warby Parker, Allbirds and Harry’s), and Matt Bellamy, the chief of Muse.
The co-founder and CEO Jonathan Fudem had the idea while working on the Paypal fund team. There, he has seen many arrivals with Slick UX tripping on the same obstacle to placing on the market: convincing merchants to exchange their existing payment flows.
“It is difficult terrain,” said Fudem, adding that many traders do not even have the freedom to choose their cashier supplier; It is often decided by their electronic commercial platform.
By using SMS, OneText does not require a merchant to replace the existing bank of their website. While large platforms like Instagram and WhatsApp also have electronic commerce features, Fudem thinks that brands always need direct and family relationships with their customers.
OneText considers himself a competitor of SMS marketing companies known for mass, impersonal messaging and spam links.
Instead, he uses a combination of tools – including bidirectional conversations powered by AI and humans in the loop – to improve conversions from 20% to 30%. Features such as recovery of trolleys, high post-purchase sales and specific recommendations for buyers contribute to this performance significantly.
Under the hood, OneText runs its own portfolio, which integrates into the existing processor of a brand to carry out transactions. Onetext safely the payment of a customer’s payment information after their first purchase. Therefore, they can reorganize with a single answer.
This “Card-on-File” configuration is what OneText thinks makes its text similar to the load of items in a room during a stay at the hotel.
To do this work, OneText uses what Fudem calls “consent” automation. If a brand wishes to invoice a customer for a reorganization, OneText sends an SMS saying that payment will pass within 24 hours unless the customer cancels. It is deactivated by default.
Over time, it plans to extend the network so that buyers can use their vaulted profiles on several brands, with pre -filled payment data and smarter recommendations.
In this sense, the company is built towards something much larger: a multi-brand and native SMS payment network.
“Building a consumer -oriented portfolio that is 10 times better is really difficult,” said Fudem. “But we can create a platform of commercial text to consume that brings the experience” load it to your room “, only now, it’s your phone number. This is how we are going to build the network.”
OneText went through Y combinator in 2023 and quietly built its platform after the demonstration day. Today, the platform has medium-sized electronic commerce brands, making 10 to 100 million dollars in annual income, as Fudem says, although it also takes care of smaller startups and large companies.
“We have evolved from 3x from one year to the next and made millions of income,” said Fudem, who launched the company with CTO Daniel Brain.
