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Tesco's Dunnhumby Buys BzzAgent For $60 million

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Tesco’s wholly owned subsidiary Dunnhumby has acquired Boston based BzzAgent for around $60 million, we’ve confirmed. The companies will announce the acquisition today but is not disclosing the terms of the deal. And no, I didn’t make up any of the words in that first sentence. This is just how companies name themselves today.

BzzAgent was originally founded way back in 2001, and bootstrapped itself until 2004 when it raised a $750,000 angel round. In 2006 they added another $13.8 million in funding from General Catalyst and Flybridge. They have 64 full time employees, and another 200 contractors managing the BzzAgents (see next paragraph).

Today they have some 800,000 BzzAgents – people who compete to be first in line to try free or discounted products. The more they chat about those products online, the more likely they are to get more stuff. Watch this video about BzzAgent by a user to see how into it they get. Near the end she talks extensively about how to move up the status ladder, and how doing things like not creating content after receiving free stuff can really hurt that status.

If you’re a brand, you’ll be more interested in seeing this video, which summarizes a successful campaign for Starbucks. The company has a rumored $20 million revenue run rate, so clearly brands are getting something measurable out of the service.

Dunnhumby is an interesting company in its own right. They help retailers manage loyalty cards and targeted, data-driven merchandising. And despite that ridiculous pie chart thing on their about us page, they’re supposedly doing quite well, with something like 200 million cardholders being managed and half a billion dollars in revenue.