Contact: Jarrett Streebin, Ben Kolada, Vishal Jain
Google continues to gobble up startups, and we’ve just uncovered a deal that supports its near field communications (NFC) ambitions. We’ve learned that Google recently picked up Zetawire, a Canadian startup focusing on mobile payments transactions. Like most of Google’s buys, this was a small deal, but it plays into a bigger market.
Little is known about Toronto-based Zetawire, but we suspect that the company was in the pre-revenue stage, making its only valuable asset a patent and corresponding trademark awarded by the US Patent and Trademark office. According to the filing, the patent provides for mobile banking, advertising, identity management, credit card and mobile coupon transaction processing. These features would allow a consumer to make purchases using their smartphone instead of their credit card. Think of a smartphone with this technology as a virtual wallet (in fact, the company has also trademarked the name Walleto for these very purposes).
This acquisition bolsters Google’s position in the coming wave of NFC and the phone as a device for payments, tracking and identification. For Google, the timing of the deal couldn’t have been better. Although we understand that the transaction closed in August, just earlier this month Google released its Nexus S smartphone, which has built-in NFC capabilities. In the meantime, Google’s competitors are hard at work. Research in Motion has also filed a patent for NFC functions, and Nokia in June announced that all of its phones will have NFC capabilities by 2011. Isis, a partnership involving telcos AT&T, T-Mobile and Verizon, is also planning a similar mobile wallet and UK startup Proxama has been working on NFC-focused technology for payments and advertising. (We’ll take a deeper look at the Zetawire purchase and the greater NFC market in an upcoming Post-Merger IQ.)