New group-buying startup Offermatic grabbed $4.5 million in funding today as it seeks to distinguish itself in what is rapidly becoming a crowded playing field for online shopping.
The company, which came out of stealth mode in December, bills itself as “the love child of Groupon/Mint.com/Blippy” that doesn’t share user information publicly.
Offermatic says it uses a new model that improves conversion rates of return customers by 10 to 100 times over existing methods by linking “virtual coupons” directly to consumers’ credit cards.
Groupon and other group-buying competitors sign members up to receive deeply discounted offers from local merchants looking to grab new customers and hip reputations online. Mint.com, acquired last year by Intuit, helps users track their finances online, while Blippy allows users to show recent credit-card purchases to friends.
Offermatic enables online targeting of offline purchases – where it says 94 percent of all commerce happens – bringing the hyper-targeting of Google Adwords to real world commerce.
The average redemption rate for online coupons is only half a percent, so tools that help marketers find a more efficient way to reach new customers are in high demand right now.
Offermatic lets retailers reach people who have opted-in to receive relevant offers based on purchase history. The company currently has partnerships with more than 150 merchants, up 100 percent from 75 merchants at its launch Dec. 7.
Its members get more valuable offers by progressing through different “levels” within the Offermatic platform, unlocking better offers by using their points.
Members can also earn points by adding more debit or credit cards to Offermatic, for transactions made using those cards, for inviting others to use Offermatic, and by sharing offers on Twitter and Facebook.
The company said it will use this funding — its first institutional round — to build its team and expand its services for consumers and retailers. The funding was led by early-stage venture capital outfit Kleiner Perkins Caufield & Byers. A group of leading Silicon Valley investors including SV angel investor Ron Conway, former CEO of AdMob, Omar Hamoi, and early executives from Facebook and Mint.com also participated in the round.
In addition to participating in the round, Hamoui will join Offermatic’s board of directors.