"Today, the way people transact has evolved," newly appointed chief business officer (CBO) of Tilia Catherine Porter told me in an interview. "The rise of user-generated content (UGC) across gaming worlds, social platforms and beyond means that we need a way for users to pay other users, users to pay creators and creators to pay their collaborators -- even if you don't know the real identity of the person you're paying."
This contrasts with traditional online payment infrastructure designed for one-way transactions between users and merchants.
Tilia wants to make it easy for companies that need financial services in a digital economy world (including the metaverse) to pay and transact with anyone in a regulated way.
The company, which has built a payment platform intended for gaming platforms, virtual world publishers, mobile application developers and NFT providers, said Tuesday it has secured strategic investment from J.P. Morgan Payments and Dunamu, a Seoul-based operator of crypto exchange Upbit.
With the latest round, Tilia has raised a total of $22 million since its spin-off from Linden Lab, the creator of Second Life, in 2022 (it didn't share how much was raised this time versus in its first tranch from 2022). The goal of the startup is to help platform operators capture more of the value of all the transactions made related to their product.
"These kinds of transactions are happening in a grey market, where users move off your platform to send payments to strangers via Venmo or Cash App, and they have no protection," Porter said. "The only way [most companies] can pay their users and creators is if they turn them into 1099 contractors, and that isn't scalable."
In 2019, Linden Lab officially launched Tilia, which "allowed users to buy Linden Dollars to use them to pay other people within Second Life and cash them out," Porter said, adding that using money seamlessly "between physical and digital life was game-changing."
After the payment platform took off, regulators interfered and "required a business to secure money transmitter licenses (MTLs) for every state and territory," Porter said. Instead of shutting down, Tilia worked hard to get the necessary MTLs, which took seven years and $35 million.
The company plans to use its new capital to increase the size of the team, which currently has more than 70 people, to meet the needs of its growing business and continue to scale its platform.
"We are working with J.P. Morgan Payments to enhance its current capabilities throughout its processing platform, including providing increased payment and payout methods, expanding payout currencies and support services," Porter said.
In addition, the outfit will use the funding to build new partnerships across all the verticals it serves, Porter told TechCrunch.
Porter said that Tilia's payment products can be used individually or as a fully integrated end-to-end solution. Tilia declined to share how many users are active on the payment platform today, but says it is "powering millions of transactions, including Second Life's $650 million economy."
Aside from the financing, the startup has appointed a new chief executive officer, Brad Oberwager, an industry veteran who has served as executive chair at Tilia and led tech and consumer-focused companies including More.com, Blue Tiger Network and Bare Snacks. Tilia also has appointed its first CBO, Porter, who previously led global partnerships and fintech innovation at Meta, and who worked for other tech companies like OpenTable, LinkedIn, Google and Oracle. Finally, Tilia also has appointed Aston Waldman as chief financial officer.
"Today's payments infrastructure was built for traditional commerce -- it hasn't caught up with the new way of living and working in a digital, creator-driven economy," said Oberwager in a statement. "At Tilia, we have a massive opportunity to unlock new revenue streams for both online creators and the platforms they build in, whether they are gaming worlds, social platforms, or next-generation marketplaces."
Note: This story originally reported that Tilia raised another strategic funding from J.P. Morgan Payments; we've updated the story to reflect that Tilia has raised a total of $22M in strategic funding from J.P Morgan Payments and Dunamu, a Seoul-based crypto exchange operator.