In the last couple of years, the advent of group buying and daily-deals sites has given consumers regular access to big discounts online for things like whitewater rafting, hot yoga, laser hair removal, and tapas. Meanwhile, the slightly more practical customers have been left with Sunday circulars.
Enter SavingStar. The Waltham, MA-based company’s fully digital and mobile national couponing system is hitting the ground this week, fueled by $7 million in new funding from Flybridge Capital Partners, First Round Capital, and IA Ventures. Today the company will launch an app for iPhone and Android, and its new website goes live tomorrow. “It’s a seamless, easy, anonymous way to get savings on something you do everyday,” says CEO David Rochon.
SavingStar has attracted more than 20,000 merchants across the U.S., Rochon says. Interested consumers can register their existing grocery or drugstore loyalty cards with SavingStar via the mobile app or website, and check out the discounts offered by brands through the platform. When consumers swipe their loyalty card at the checkout stand, and the savings are added directly to the consumer’s SavingStar account. Savings can later be redeemed via a bank or PayPal account, as an Amazon.com gift card, or as a donation to charity. Some stores will enable to consumers to get the discount on the spot, Rochon says, but the other methods allow the service to be deployed nationally across a range of retailers.
The company is looking to harness part of the $3 billion to $4 billion in discounts that’s available annually through Sunday circulars, Rochon says. “How do we take all that value that is currently available to the consumer and make it available digitally?” he says. “I can make that decision if I want the offer when I’m in the store. We are the first ones in the marketplace to deliver this through technology.”
“This is not your mother’s coupons,” he adds.
The company’s $7 million Series B round comes from Flybridge’s Jeff Bussgang, Josh Kopelman of First Round Capital, and Roger Ehrenberg of New York venture firm IA Ventures, with the backing of some angel investors as well. The company started out with six employees and is now up to 24 people. Its headcount is expected to hit 35 by the end of this year, Rochon says.
If the name SavingStar isn’t familiar to you, that may be because the company was first called SaveWave (say that three times fast, and it sounds like the grocery chain Safeway, says Rochon). UPromise, a reward services company that helps families save for college while buying everyday items, spun its grocery services division out as SaveWave to extend the technology beyond families looking to save for school. It raised $2.3 million in Series A money last August, led by Flybridge and First Round, with participation from Founder Collective, IA, and angel investors including Silicon Valley’s Ron Conway and Upromise’s founder and former CEO, Michael Bronner. SavingStar president Michael Libenson was a panelist at Xconomy’s Mobile Madness event in March.
