Fondue CashBack, the Shopify app that replaces coupon codes with brand-embedded CashBack announced today it has closed on a $10.5m seed round led by Quiet Capital and Hanaco Ventures.
Other investors in the round include Infinity Ventures, Ground Up Ventures, Sugar Capital, Starting Line, R-Squared Ventures, Gaingels, Verissimo Ventures, Samsung Next, and JAM Fund. A number of founders and executives joined the round as well from consumer brands and fintechs including Casper, TheRealReal, Thumbtack, Candid, Carraway, CatchCo, Loox, Perry Ellis, Melio, Ramp, Plaid, and Venmo.
“Brands are addicted to legacy discounting strategies like coupon codes, thinking it’s just the cost of doing business,” explains Oren Charnoff, CEO and Co-Founder. “Fondue CashBack is more profitable than legacy discounting so brands enjoy a positive feedback loop of higher conversion, more profit, more LTV – money they can reinvest back into sustainable growth.”
With CashBack, shoppers see they’re eligible for an incentive throughout the purchase journey and then redeem it post purchase in a method they choose: extra store credit, gift cards, cash, and more.
Fondue is working with more than 100 merchants ranging from emerging brands to publicly traded and from dropshippers to DNVBs to marketplaces. Fondue plans to use this round to scale up product development, expand its offline CashBack channel, and accelerate its go-to-market strategy to meet rapidly growing demand.
Ecommerce sales are expected to cross $5.5T in 2022 with double digit growth continuing year over year. Discounts are critical for driving conversions throughout ecommerce, and are reported to account for 17.9% of total sale revenue.
“Navigate to any Shopify merchant and you’ll be pummeled with coupon code offers. These are great for the simple reason that they work, but they come at an increasingly prohibitive hit to margin,” notes Dr. William Herlands, CTO and Co-Founder. “One of our merchant partners put it best: ‘I give 15% codes to new shoppers, but that cuts my profit by over 40%. It’s impossible to grow profitably like that’.”
“It’s never been harder or more important than today to grow profitability in ecommerce.” added Abraham Lucey, COO and Co-Founder. “CashBack means brands can meet this mandate by giving agency to shoppers and being rewarded with larger AOV, more profit on first purchase, greater engagement, and higher LTV. ”
Charnoff, Herlands, and Lucey come from founding, backing, and operating their own ecommerce brands and have brought that perspective to build a brand-first product. The Fondue CashBack app available today in the Shopify App Store has massive ROI upside with a 30 day free trial and charging just $19.99 a month after that.