London-based CheckoutSmart, a cashback app for UK supermarket shoppers — and similar to Groupon’s Canada and U.S.-only Snap — has raised a £1.5 million round of funding. Not only is the startup founded by Chris Howarth (who previously founded and exited retail analytics company Retail Insight) but the list of backers is also noteworthy, given their experience in the retail/rewards space.
It includes Duncan Jennings, who founded vouchercodes.co.uk, Glenn Elliott and Chris Whitcombe, the founders of employee benefits site Reward Gateway, and Paul Nikkel, the founder of Quidco, the UK’s leading cashback site.
Founded in late 2012 but only officially launching in February this year, CheckoutSmart’s iOS and Android app delivers cashback offers for various groceries — or fast-moving consumer goods (FMCG) — from leading brands to a user’s phone. These can then be redeemed once you’ve purchased the product at any leading supermarket by taking a photo of the receipt using your smartphone and uploading it to CheckoutSmart via the app.
Receipts are then analysed automatically with cashback credited to your account and, once you’ve accrued enough cashback, transferred to your bank/PayPal account.
For major FMCG brands, the draw is that CheckoutSmart provides a more direct marketing channel, rather than having to go through the major supermarkets to reach customers with special and loyalty-based offers.
“One of the most fundamental challenges FMCG brands face is they don’t have a direct relationship with their consumers. Until now, the relationship has been between the shopper and the retailer in which the brand is purchased — that’s a huge issue for FMCG,” CheckoutSmart founder Chris Howarth tells me. “So the problem we’re solving is connecting FMCG brands directly to their consumers and enabling those brands to reward their consumers directly.”
In addition, he says that offers can be “personalised, made more relevant and made available instantly,” irrespective of which retailer the shopper chooses.
Zooming out a little, Howarth notes that competitors in the space — who along with Groupon’s Snap include Ibotta in the U.S., Checkout51 in Canada, and Shopmium in France — have collectively raised $70 million in funding over the last two years, “so it’s an exciting area for entrepreneurs and investors.”
As for how CheckoutSmart makes money, Howarth explains: “We negotiate exclusive offers with FMCG brands and charge a campaign fee for the distribution and redemption of those offers. Unlike many solutions, we charge only when an offer is redeemed, and brands can target down to the individual shopper, so the return we deliver is off the scale compared to other investment choices. This kind of direct relationship between brands and their consumers is the future of consumer goods and we’re having fun being a part of the revolution.”
Vive la révolution indeed.