Greylock Partners announced today that they would be investing $4 million in New York City based company, Payoneer.  Payoneer is a company that allows companies and business partners to pay each other via MasterCard online.  Payoneer is a private company that markets and manages prepaid MasterCard cards and works with the Royal Bank of Scotland and the First Bank of Delaware to process card transactions.

Upon realizing the importance of developing strong partnerships with Web 2.0 companies, Payoneer currently works with selected business allies such as Metacafe, Amie St., oDesk, and BitWine.  Using such a service could also be very beneficial for Web 2.0 start-ups with only a few employees that share office expenses.

“The Internet payout space may well become a killer application in the next few years as Internet companies transition to smarter ways to pay out their partners around the globe,” stated Moshe Mor, a partner at Greylock Partners. “Payoneer’s team has deep payments experience, and an already impressive track rate of customer adoption and solutions. We’re delighted to work in partnership with Payoneer to fuel the company’s expanded market presence.” 

“Web-driven businesses have the unique opportunity to use payments as a retention tool, not just a cost line-item,” stated Yuval Tal, the CEO and founder of Payoneer. “With our additional funding on board, we’ll be adding to our team, expanding our service offerings, and working aggressively to win new accounts during this exciting high-growth time in our market.” 

Payoneer was founded in 2005 and maintains a research and development facility in Tel Aviv, Israel.   The co-branded MasterCards provided by Payoneer can be used anywhere whether it is in any store, online, or ATMs that MasterCards are accepted.

Proven Model Cases:
Citigroup Inc./eCount Inc.
“The prepaid card market is experiencing high growth, and is currently estimated at more than $2 trillion worldwide, as corporations and consumers continue to move from paper checks to electronic-based payment methods” states a Citibank press release announcement of the fairly recent eCount Inc. acquisition.

eBay Inc./PayPal
Another proven model is the legendary $1.5 billion acquisition of PayPal.  In July 2002 eBay acquired PayPal for $1.5 billion in stock.  PayPal now has 114 million customers as of October 2006 over 103 markets and 17 different currencies.

It is expected that with this round of funding that Payoneer will become hypercompetitive amongst some of the major aforementioned players out there.  I have no doubt in my mind that we’ll start seeing the Payoneer logo quite a bit more as we shop online.

[Information Source: E-mail from PR Representative for Greylock Partners]

oDesk Inc. stated that on Wednesday, September 27 that Benchmark Capital plugged in a 2nd round of funding with an amount of $8 million for the Menlo Park, CA based company. Kevin Harvey, a general partner of Benchmark Capital will be joining the oDesk Board of Directors. Benchmark is known for investing in other technology companies such as eBay, Juniper Networks, and Red Hat Software.

Kevin Harvey stated that “oDesk provides businesses instant access to talented developers all over the world, while making it seem like they’re working just a cubicle away.” Harvey was impressed with the fact that oDesk’s idea has been tested and validated by its marketplace. What is oDesk’s marketplace?

oDesk.com services enables small-to-large sized businesses to review credentials of potential employees worldwide. oDesk stands by a 3-step process behind their web services:
Hire Process - Is when an opening is created and candidates apply to these jobs. Managers are able to review candidate profiles and interview the potentials.

Manage Process - Allows managers to monitor their team and review their work along with assigning and discussing tasks

Pay Process - Employees pay on an hourly basis after reviewing timelogs of the hours worked.

The type of jobs in oDesk’s network revolves around typical ‘geek jobs’ as their niche and includes candidates available in over 50 countries including Russia, India, and USA. Some of the latest jobs posted by Buyers include Design/Flash (12 week project), ASP New Social Networking Website (1 week), PHP/MySQL: SMF Forum Intergration (1 week)

Hiring managers can dig up and filter candidate profiles using search criteria such as hourly rate demanded, technical skills, amount of positive score feedback, how many tests were passed by candidates, geography, and previous work history. “oDesk has a unique approach; they are the only marketplace that offers a rich set of tools to manage remote teams. And fortunately, the time is right. Nearly all of our portfolio companies are building remote teams, and facing the challenges of trust, time zones, and collaboration — exactly the problems that oDesk solves” said Kevin Harvey.

Amit’s Thoughts:
I could definetely appreciate the concept behind oDesk, but there are still the possibilities of fraud cases. Fortunately from what I’ve read about oDesk is that they have feedback scores which I’m assuming is similar to the feedback scores behind eBay sellers. The worse feedback someone has, the less likely you would want to buy items from them which is no different from technical contractors.

Focusing on a niche segment for jobs in the ‘geeky segment’ is definetely a good idea and and the fact that it is an open global arena definetely breaks down some of the previous barriers for finding technical talent on a large scale. I have a friend that had contracted some work to a small Indian firm in Bangalore and the problem was that he was not able to monitor the prototypes closely nor did he know whether this was a quality company because all you could really go by is their website. This could be a great problem solver for such issues.