In an era where we can buy whatever we want from wherever we want nearly in the blink of an eye, loyalty, rewards and membership programs have become a major lever in capturing repeat consumer spend — Amazon Prime perhaps being one of the most successful examples. Now, a company that has built up shopping frequency across multiple retailers by rewarding buyers with cashback is announcing a big round of funding to expand its business
Dosh, a startup and app of the same name that lets you get cash back when you shop at selected retailers with a linked card, has raised $44 million in a Series B round of funding from investors that include PayPal and Goodwater Capital. The company has paid out $25 million to some 3 million uses since being founded in 2016.
It claims to be the largest card-linked cash-back app and network in the U.S. with Sam’s Club, Forever 21, Cost Plus World Market, Target, Mattress Firm, Papa John’s, U.S. Polo Assn., Chili’s, and Payless ShoeSource among the retailers integrated with it.
No valuation is being disclosed but we understand from a source close to the company that it is $240 million.
The funding brings the total raised by Dosh, based out of Austin, to just over $100 million. Other investors in the company have included Next Coast Ventures, Chetrit Ventures and Extol Capital.
There are dozens of services on the market today that let users get cash back when they make purchases. They include genre-specific apps like Mogl for restaurants, shopping portal Spring, numerous credit cards, and even PayPal itself. CEO and founder Ryan Wuerch says that Dosh is different from the rest because of its implementation of AI and algorithms that respond to your shopping behavior to steer your activity.
“Dosh uses behavioral stimuli to directly connect merchants and consumers with predicted results,” he said in an interview. “Dosh subscribers automatically get cash without having to change their behaviors or actions. Dosh technology drives incremental transactions, triggering an immediate cash incentive to the consumer and creating positive associations with merchants and brands.”
He says that Dosh makes its own Dosh (which in the UK is slang for “money”) by taking a percentage on transactions, although he wouldn’t specify the number.
PayPal exists as one of the options for getting your cash back — others include your bank account and donating to charity — but Wuerch says that PayPal is solely a financial investor in the startup.
The company today operates only in the US and that is the plan for the next three years, with its target being to have 1 million merchants on the platform by that time. The sweetener is that it’s helping to lift purchasing, even among the biggest of its partners, and pointedly those who have been finding it a challenge to do battle with Prime, which Amazon uses to create loyalty for itself rather than a plethora of retailers.
“Dosh subscribers become sustained, repeat customers faster,” said James Lerner, Senior Product Marketing Director, Walmart Global eCommerce/Samsclub.com, in a statement.. “Those customers are visiting 29% more often, and spending 60% more per visit after 60 days when compared to non-Dosh subscribers.”