Avocado Payments, a developer of software that lets merchants accept Apple Pay and Google Pay without a hardware terminal, has just completed raising a seed round and could be ready to raise an A round next year, CEO and founder Chris Sturm told this news service.
Sturm declined to say how much the company raised in its seed round, but said that the round is enough to fund operations deep into 2020.
The Los Angeles-based startup’s top priority now is building out its team, with a focus on hiring software engineers, he said.
Another key focus is onboarding additional merchants to its beta, Sturm said. Avocado is interested in hearing from banks, merchants and other potential customers or partners that could benefit from using its software, he said.
Avocado’s primary offering works in the same fashion as a QR code, the CEO said. It permits anyone to pay another person or business that they owe money to, without requiring special software, hardware or app downloads. The addressable market includes all businesses that use paper invoices, the executive said.
Sturm said he came up with the idea for Avocado Payments just before Memorial Day weekend in 2017. At the time, Sturm was working on a consulting project that was eating up his time and energy and which forced him to cancel a long-awaited vacation. His mood worsened when he hit a roadblock on one part of the project, and he decided to take a bike ride to clear his head.
Sturm said, as usual, he only took a phone and an insurance card with him for the bike ride. As he headed back on his bike after completing the first half of the ride, he came upon a roadside stand and had a sudden craving for a hot dog. He realized though that he had no cash, but remembered that his phone had Apple Pay, he said.
After a second thought, Sturm said he concluded it was highly unlikely that the stand had a hardware device to accept Apple Pay. He returned to his bike without the hot dog, but with the genesis of a problem, he wanted to solve—to allow any merchant to accept phone-based payments without special hardware. When he returned home, instead of working on the consulting project, he began writing the initial code to create Avocado Payments, he said.
Sturm came up with the name for the company around the same time. During that Memorial Day weekend as he was writing code for the project, stories about “avocado toast” were trending, the executive explained.
While the company is largely focused on hardware-free payments solutions, it also has an R&D partnership with Star Micronics looking at a potential hardware-based solution for processing codes wirelessly, the CEO said.
Sturm is also the owner of 8M Labs. a consulting firm he started in 2011 that focuses on rapid application prototyping for startups and established businesses.
Sturm is a 2003 graduate of Marquette University. He has a double major in Business Administration and IT. His outside interests include club football and Tae Kwon Do, according to his LinkedIn profile.