Baby Breaker Birth Announcements

Welcome back to Baby Breakerdom! This week's quest to find budding Rule Breakers makes me wonder whether credit cards and airline reservation agents will last beyond 2016.

We begin this week with Pay By Touch, a biometrics company that -- get this -- is developing a system whereby you'll use your fingerprints to access your bank accounts. Imagine that for a second. No more, "Sign here." Or, "Can I see some ID, please?" Instead, your fingers would literally do the walking through that Nordstrom (NYSE: JWN  ) shopping spree.

It's easy for me to imagine venture investors salivating over the idea. But if they are, there's no relief to be had. Pay By Touch, you see, has taken money from almost everyone but VCs, including $60 million in Series C financing from hedge funds Plainfield Asset Management and Scout Capital in a deal that was announced yesterday. And that's on top of $130 million in debt and equity financing raised just three months ago.

What will the company do with the extra cash? Buy its way into new markets, of course. VentureWire reports that Pay By Touch has already acquired six companies in the areas of payment processing and loyalty programs, and now it wants more. Expansion plans include reaching out to customers where pay-as-you-go, credit-driven services are becoming more prevalent, including healthcare, the Internet, petroleum, convenience stores, and quick service restaurants.

Next up is ITA Software, which has created a system that does all the back-office heavy lifting required to book airline tickets. That should be completely unremarkable, of course, especially in light of the dominance of existing systems from Sabre Holdings (NYSE: TSG  ) and Cendant (NYSE: CD  ) . But here's the thing: ITA's engine can do for $2 per ticket what the others do for $12 to $15 per ticket.

Enter Battery Ventures. According to VentureWire, the firm has established a consortium of investors that, all told, have poured $100 million into ITA. That's an extraordinary amount of cash, to be sure. But the volume -- and the timing -- is no accident. Indeed, according to VentureWire, airline contracts with the existing reservation systems will soon expire, opening the way for AMRCorp.'s (NYSE: AMR  ) American and others to open negotiations with all interested parties, including -- you guessed it -- ITA.

Sadly, there were no Baby Breaker public offerings this week, which means it's time to say good-bye. See you back here next Friday when we continue the quest to find the next ultimate growth stock.

For more Rule-Breaking Foolishness:

Netflix. Marvel. AOL. Starbucks. Find out how David Gardner landed these and other multibaggers by taking arisk-free trialto Motley Fool Rule Breakers today. You'll also learn why our analysts are smashing the market by more than 20% as of this writing. Or simplysign upnow and receiveStocks 2006, which features our analysts' best picks for the year ahead, free. All you have to lose is the prospect ofbetter returns.

Fool contributorTim Beyersloves the idea of investing in solar power, even though the sun hasn't exactly been friendly to him over the years. He owns shares of Cendant, which is a Motley Fool Inside Value pick. You can find out what is in his portfolio by checking Tim's Foolprofile. The Motley Fool has an ironcladdisclosure policy.


Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 510822, ~/Articles/ArticleHandler.aspx, 9/19/2014 5:56:21 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement