OneText, a startup dedicated to enhancing the online checkout experience through a “text-to-buy network,” has successfully raised $4.5 million in seed funding. Founded by former PayPal employees, the company’s recent funding round included contributions from notable investors such as Khosla Ventures, Coatue, Citi Ventures, Y Combinator, Good Friends, and Muse’s frontman, Matt Bellamy.
The concept for OneText originated from co-founder and CEO Jonathan Fudem’s experiences on PayPal’s checkout team, where he noticed the challenges merchants face in changing their existing payment systems. Many merchants are bound to their e-commerce platforms’ checkout solutions, making it difficult for them to explore alternatives. OneText addresses this issue by utilizing SMS technology to streamline the transaction process.
Positioning itself against traditional SMS marketing companies, which often employ impersonal and spam-like messaging, OneText aims to improve conversion rates through interactive features that include AI-driven two-way conversations and human oversight. Key functionalities of its platform include cart recovery, post-purchase upsells, and tailored recommendations for shoppers.
OneText operates its own wallet, allowing seamless integration with existing payment processors to facilitate transactions. After a customer’s first purchase, the service securely stores their payment information, enabling future reorders with a simple text response. The platform inherently includes a “card on file” method, making it reminiscent of the convenience offered in hotel billing systems.
Fudem emphasizes what he terms “consentful” automation within the platform. For any reorder payments, OneText sends customers a notification indicating that a charge will occur within 24 hours, unless they opt out—a process designed to prioritize user consent.
The company underwent Y Combinator’s accelerator program in 2023 and has since onboarded 50 rapidly growing e-commerce brands, leading to an impressive average increase of 14% in their revenue. Partnering with both midsized companies with annual revenues ranging from $10 million to $100 million, as well as smaller startups and large enterprises, OneText boasts a trajectory of 300% growth year-over-year and substantial revenue figures.
Moreover, Khosla Ventures and Y Combinator have recently invested in another startup, Onyx, which is set on revolutionizing AI enterprise search, raising $10 million in funding, reinforcing the trend of investor interest in innovative digital solutions.
OneText’s forward-thinking approach and solid foundation suggest promising potential in reshaping online commerce, making transactions simpler and more user-friendly—holding hope for a future where consumer purchasing becomes even more intuitive.