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Tipjoy Raises $1 Million For Its Simple Micropayment Platform
Tipjoy, a Y Combinator-funded micropayment startup that launched in February, has closed a Series A funding round led by Betaworks, with The Accelerator Group and Chris Sacca also participating. The company hasn’t disclosed the exact amount of the funding, but says that it is just shy of $1 million.
Tipjoy offers as a basic micropayment system that allows bloggers to leave virtual tipjars on their sites, asking for donations from users who appreciate their material. The system can also be used to collect money for any number of purposes, including charity and digital goods.
To enable Tipjoy, site owners embed a small piece of code on their page, which is linked to their main Tipjoy account. To leave a tip, visitors need only enter their email address and the amount they’d like to give. Tipjoy then sends them an email with their outstanding balance, which they can pay off using PayPal (credit card support is on the way).
The system’s most obvious flaw is that users are never held accountable for their tips - nobody comes after you if you fail to pay off your Tipjoy debt. But promising the payment was voluntary in the first place, so there’s not much of a reason to leave a fake tip.
Here’s a sample Tipjoy Tipjar, offering one of the site’s press releases for 99 cents (all proceeds go to charity):
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TipJoy - A Better Tip Jar For Content
The idea of a “tip jar” on blogs and other content sites to help bring in a few extra dollars has been around for years. Donations and payouts are generally made through PayPal, and there are a number of plugins for various blogging platforms to make the process easier.
New Y Combinator startup TipJoy is designed to make it even easier to get people to click that tip button. Readers are not required to create an account or have a PayPal account to leave a tip, so there is little friction to them getting started. If they want to leave a tip they just click the button and type in their email address. I’ve added a tip button below to show how it works - any money we receive we’ll be distributing back to other bloggers who add the button, and/or donating to charity.
If you leave a tip as a new user, you start to build up an account debit. You can eventually pay that off via PayPal (TipJoy keeps 2%), although no one comes after you if you choose to skip out on the bill. You can also start to ask for tips on your own site, and anything people leave for you offsets what you’ve given to others.
The TipJoy site shows popular sites that have received a lot of tips, and you can also send any URL or email a tip directly as well. As a tipper, you can choose the amount you’d like to tip by default (starting at ten cents). Then, every time you click the tip button on a participating site, that amount is added to your bill.
If you want to cash out of your tips you can choose to either receive an Amazon gift card or donate the amount to charity. For now, you can’t receive cash since the company wants to avoid becoming a regulated money transfer service. In the FAQs they suggest they’ll be adding this functionality eventually.
I like the service because it creates a network around the idea of tipping for content. Users are both tippers and tippees, keeping a balance that they pay off eventually. I also like the fact that people don’t have to pay off that bill. It creates an interesting psychology where people find it very, very easy to leave the tip, and then may feel guilted into paying off the bill. At the very least, TipJoy is an interesting human psychology experiment.
The service has a number of options for integrating buttons and graphics on to the site. I imagine they’ll be adding plug-ins and other tools as well over time.
TipJoy was founded by Abigail Kirigin and Ivan Kirigin. The company blog is here.
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