Metaverse payment platform Tilia gets strategic investment from J.P. Morgan

"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.