Ho-Chunk Inc., a company owned by the Winnebago Tribe of Nebraska, has purchased majority ownership in an Omaha-based online escrow startup, PaySAFE.
PaySAFE founder Matt Medlock said he and the startup's staff of five will continue to run the company and Ho-Chunk will serve in an investor role that will allow PaySAFE to expand its staff over the next year. The company is currently looking to hire two to three people to serve as software developers and in customer service.
Ho-Chunk sees its role “as providing capital and infrastructure to allow us to go through our growth stage,” Medlock said.
PaySAFE takes a concept that long has protected home buyers and sellers and expands it to a wider variety of transactions by providing online escrow services for buyers and sellers. The service can be used by a consumer for almost any transaction where there's a lack of trust or familiarity, such as home improvement projects or buying an expensive car, a piece of artwork or equipment online.
Many of the transactions made through PaySAFE involve shipping large items. One of Ho-Chunk's subsidiaries, Flatwater Group, operates a logistics company that offers transportation and shipping services.
“There really isn't anything online that protects both parties, the buyer and the seller. That's really what attracted us to it,” Ho-Chunk spokesman Patrick Foley said. “But also the logistics part of it. ... Since we have a logistics company, it made some sense.
Ho-Chunk operates more than 30 subsidiaries in a diverse range of industries, including government contracting and logistics. Ho-Chunk Inc. was originally financed with income that came from the Winnebago Tribe's casino near Sloan, Iowa, and the company was founded in 1994 to help diversify the Tribe's investments beyond gambling.
PaySAFE has already moved into Ho-Chunk's new Bellevue office, which it purchased this year and named Ho-Chunk Place. The three-story office building currently houses 55 employees and offers additional space for future expansion because of government contracts the company was awarded earlier this year. The company won contracts to provide information technology and human resources services for various government agencies, including NASA Goddard Space Flight Center facilities.
One of PaySAFE's growth plans over the next couple of years is the expansion of the service for international trading, Medlock said. The logistics side of Ho-Chunk's Flatwater Group would aide in that expansion.
“When people are buying and selling... and logistics companies need to get this equpiment or product from one country to another, often what bogs that down is the payment,” he said.
Medlock, who is a current member of the 2013 Pipeline fellowship program for innovators and investors in Kansas, Missouri and Nebraska, said the fellowship helped in securing the funding.
“Ho-Chunk provides that capital as well as infrastructure to allow us to grow and accelerate growth quickly,” he said.