Facebook co-founder leads $7 million round in ShopSavvy
The mobile shopping app, first to use barcode scanning technology, lands Eduardo Saverin as its top investor.
Up until today's $7 million round of funding, mobile shopping app maker ShopSavvy had bootstrapped and survived on its own revenue (more on that later) since its inception in 2008. This was the first app to scan barcodes to search online and local retailers for the best prices.
The round was led by Eduardo Saverin, Facebook co-founder and private investor. Saverin, who wasn't made available for comment, also joins the company's board.
"People have wanted to buy the company or invest, but it took us awhile to find the guy who really understood what we wanted to accomplish," says ShopSavvy CEO Alexander Muse. "We have to have a shared vision of what the world is going to look like. We are working on new ways to make money with social connections and shopping is the most obvious way to go."
Muse says his relationship with Saverin, made famous by the 2010 movie "The Social Network," started as a friendship and after dozens of conversations became a partnership. ShopSavvy is also adding Brad Martin, former Chairman and CEO of luxury retailer Saks and chairman of RBM Venture Company, to its board of directors.
ShopSavvy is using the money to hire more engineers, add other execs, and open a new San Francisco office. It also has an office in Dallas.
ShopSavvy has been downloaded more than 20 million times and has more than 40,000 partnerships with retailers including Wal-Mart, Target, Best Buy, Sears, Nordstrom and Barnes & Noble.
The company has survived on revenue generated through AdOns: Ads that businesses use to target customers based on the store they are in (GPS) and the product they are interested in buying (UPC... or traditional barcodes). AdOns can take the form of a coupon, a rebate, loyalty card or any other creative marketing ploy a business chooses. ShopSavvy uses a mobile wallet called QuickPay to help close customers on the spot.
"People come to us and pitch ideas for new ShopSavvy apps," says Muse, who's been in the tech industry for 20 years with four successful startups. "They are shocked when I explain the ShopSavvy app is a full-time job. This is what we do all day, every day."
Stay tuned for a revamped ShopSavvy iPad app. It will be about finding the things shoppers are interested in and creating lists. It won't be about scanning bar codes. Muse didn't have more details to share. I ask if the era of the bar code will ever come to an end.
"Barcodes are about 38 years old now, and hopefully 2012 will be the year of the QR code," says Muse, referring to two-dimensional Quick Response codes (the square ones you can scan with a smartphone). "But they're not going away any time soon. There's something about the one-dimensional code we all understand. We hear the beep and that means there's this magical pricing info manifesting into reality. People smile when they hear that beep."