OneText raises $4.5M from Y Combinator, Khosla to reinvent shopping by text

Yahoo

08-07-2025

The typical online checkout experience has become bloated with friction. And while more companies are building solutions around online checkout, few are rethinking it from scratch. One such company is OneText, which is building what it calls a 'text-to-buy network,' that lets shoppers complete purchases via text message.
The company, founded by former PayPal employees, just closed a $4.5 million seed round backed by Khosla Ventures, Coatue, Citi Ventures, Y Combinator, Good Friends (the fund created by the founders of Warby Parker, Allbirds, and Harry's), and Matt Bellamy, the frontman of Muse.
Co-founder and CEO Jonathan Fudem came up with the idea while working on the checkout team at PayPal. There, he saw many upstarts with slick UX stumble over the same go-to-market hurdle: convincing merchants to swap out their existing payment flows.
'That's a hard pitch,' Fudem said, adding that many merchants don't even have the freedom to choose their checkout provider; it's often decided by their e-commerce platform.
By using SMS, OneText doesn't require a merchant to replace their website's existing checkout. While large platforms like Instagram and WhatsApp also have ecommerce features, Fudem believes brands still need direct, ownable relationships with their customers.
OneText views itself as a competitor to the SMS marketing companies known for mass, impersonal messaging and spammy links.
Instead, it uses a combination of tools — including AI-powered two-way conversations and humans in the loop — to improve conversions by 20–30%. Features like cart recovery, post-purchase upsells, and shopper-specific recommendations contribute meaningfully to that performance.
Under the hood, OneText runs its own wallet which integrates with a brand's existing processor to complete transactions. OneText securely vaults a customer's payment information after their first purchase. From then on, they can reorder with a single reply.
This 'card-on-file' setup is what OneText believes makes its text commerce similar to charging items to a room during a hotel stay.
To make that work, OneText uses what Fudem calls 'consentful' automation. If a brand wants to charge a customer for a reorder, OneText sends a text saying the payment will go through in 24 hours unless the customer cancels. It's opt-out by default.
Over time, it plans to expand the network so shoppers can use their vaulted profiles across multiple brands, with pre-filled checkout data and smarter recommendations.
In that sense, the company is building toward something much larger: a cross-brand, SMS-native payment network.
'Building a consumer-facing wallet that's 10x better is really hard,' Fudem said. 'But we can create a business-to-consumer texting platform that brings the 'charge it to your room' experience, only now, it's your phone number. That's how we'll build the network.'
OneText went through Y Combinator in 2023 and quietly built out its platform after Demo Day. Today, the platform has mid-sized e-commerce brands, doing $10M–$100M in annual revenue, as customers, Fudem says, though it also supports smaller startups and large enterprises.
'We've been scaling 3x year over year and doing millions in revenue,' said Fudem, who launched the company with CTO Daniel Brain.