Austin-based NewComLink raises $6 million, plans to boost hiring
Jan 04, 2013 (Austin American-Statesman - McClatchy-Tribune Information Services via COMTEX) --
Of the 200 million credit applications that U.S. retailers receive each year, about half are rejected.
But many of those shoppers are creditworthy, and merchants lose tens of billions of dollars each year by turning them down, said Suneet Paul, co-founder and CEO of Austin-based NewComLink.
NewComLink' software helps retailers save sales by providing customers with financing alternatives at the register or during the online transaction.
The 4-year-old company, whose customers include a dozen national retailers and financial institutions, said Friday it has received a new $6 million investment for expansion.
Paul said the funding came from a single institutional investor, which declined to be named. NewComLink has raised a total of $21 million from backers including StarVest Partners of New York and Austin Ventures.
"We were not looking to raise money, but as we started talking to this investor we realized that in addition to money they could add a lot of value," Paul said.
The company will use the investment to increase its 40-person workforce by at least 20 people this year, he said. NewComLink, which recently moved to new offices in the Westlake area, is currently hiring in sales, software development, project management and product management.
The company is also building out its management team, including hiring Terence Spielman, former senior director and general manager of PalPal's Austin office, as chief technology officer; and David Lutz, former vice president of consulting at Oracle Retail, as vice president of professional services.
NewComLink's software works by integrating with a retailer's point of sale system in order to determine financing alternatives. The options include nonbranded credit cards, installment loans and lease purchase options, and are presented by the store clerk to shoppers as they make their purchases.
NewComLink generates revenue by getting a percentage of each complete transaction that uses its service.
The software is used in 1,200 stores nationwide, and the company plans to announce several large retail and financial institutions as customers later this year, Paul said.
Chris Pacitti, general partner with Austin Ventures, said: "There are both technology and regulatory challenges with assembling this type of marketplace. NewComLink spent 2012 proving they could get the retailers on board and the lenders on board, and now the foundation in in place for what we think is strong growth."
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