Mobile shopping app secures $900K in funding
The startup behind a mobile shopping app has closed a $900,000 pre-Series A financing round that was led by a local early stage venture capital fund.
Benefit Mobile, a pre-paid mobile wallet app that allows users to “give back while you shop,” said today that it closed the round to support the expansion of its next phase of software development, enter into new markets with white-labeled products for participating retailers and create additional integrations for the application such as direct deposit.
Benefit users can purchase discounted e-gift cards at roughly 100 participating retailers and receive an in-store mobile redemption code. Benefit then pushes the discounted amount, ranging from three percent to 25 percent, to a cause of the user's choice, such as a school, local nonprofit or health care premium.
The app is available for the iOS and Android mobile platforms.
The round was led by Start Garden in Grand Rapids and roughly seven to eight private equity partners, according to Derik Lolli, founder and CEO, Benefit Mobile.
Kim Pasquino, investment director at Start Garden, said the Benefit team has put together a great technology with a scalable platform, appealing to retailers, and integrates with large corporate environments.
Pasquino said the fund is excited about the company and how its platform can “build brand loyalty, while empowering intentional contributions.”
“Benefit is perfectly positioned to leverage the emerging mobile wallet trend in an entirely new way,” Pasquino said. “Start Garden and our co-investors recognize the value Benefit is bringing to this market and look forward to assisting Derik and his team with scaling and market adoption.”
Benefit Mobile was originally endorsed by Start Garden on Dec. 13, 2012 to perform a $5,000 marketing experiment. Since 2012, the startup has received a total of $130,000 in early stage investment capital from Start Garden prior to this round.
Lolli said Benefit Mobile is going to “continue to build our fundraising platform and also focus on creating white-label solutions for business — as a tool to offer as a rewards loyalty program.”
“We are focusing on the health care space,” Lolli said. “We are looking into the college loan space, so students and parents can shop and now three percent to 25 percent goes directly toward college tuition. We are also looking into the credit union space.”
Benefit recently partnered with Priority Health in Grand Rapids to launch a loyalty program, where the user can shop using the app and three percent to 25 percent of the transaction is allocated to fund their healthy lifestyle.
“The biggest challenges that we have faced overall is just having people on mobile phones for payments and courting retailers,” Lolli said. “We have a great group of retailers, and they continue to grow. We are in the process of bringing on a company that does $30 million in top-line revenue. It really gives us a foothold in the nonprofit space and white-label space.”