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It’s nice to be rewarded for what you do, especially when it’s for spending money or doing activities you would do anyway, such as playing games or streaming videos. And this is exactly what Swagbucks has built its business on.
Today, the company is announcing that it has raised $60 million as its first round of external funding. Technology Crossover Ventures (TCV) provided the full amount, and current Swagbucks executive chairman Chuck Davis, who is also a partner at TCV, will take over the CEO role at Swagbucks while founder and current CEO Josef Gorowitz moves to being president.
Swagbucks, under the umbrella of parent company Prodege, is in the digital customer rewards space. When users perform tasks within the company’s six categories, such as watch a video or play a game, they earn “swag bucks” which they can redeem for gift cards, coupons, or sweepstakes entries.
“We give rewards for just engaging in content or other non-transactional [activities]. Four of the six activities that we offer… are non-transactional,” said director of public relations Mark Lindsey in an interview with VentureBeat. This makes Swagbucks even more appealing to its users because they can earn rewards without having to purchase anything.
“We’re really looking to fine tune and get the company to be the best that it can be in the space. We’re going to invest in mobile and invest in international expansion,” Davis told VentureBeat.
Davis said that his 16 months as executive chairman of the company is making his transition quite smooth as he is already very familiar with the business.
“Swagbucks has always put the consumer first by helping households get a little extra back, and I am proud to build on that wonderful mission. Furthermore, bringing in TCV as the company’s first strategic investment partner and building on their experience in scaling leading digital brands is a good fit for Swagbucks and its profitable business,” said Davis in an official statement.
Davis was previously chairman and chief executive of Fandango, an online movie ticket and entertainment site. He oversaw the company’s mobile launch and expansion, signaling he will likely be comfortable in leading Swagbucks’ mobile efforts.
Of course, Swagbucks faces a number of competitors in the digital rewards space. Shopkick, Kiip, and Belly are only some of these, although they tend to specialize in certain areas such as in-store rewards with Shopkick and mobile app rewards with Kiip. Competitors in the discount space include Coupons.com, RetailMeNot.com, and a host of others.
When we last spoke to the company in 2011, it had announced that it was on track to make $15 million in revenue for that year.
The company had $53 million in revenue in 2013 and has been profitable since 2010. It claims to have over 10 million users and to have awarded $60 million in retail gift cards and PayPal cash since its founding in 2008.
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