FreeMonee announced a $34 million Series B round today, led by Charles Ryan, Chairman of UFG Asset Management, and returning investors Opus Capital Ventures, Redpoint Ventures, Sutter Hill Ventures and Pinnacle Ventures.
While FreeMonee would not disclose terms of the funding, CEO and co-founder Gadi Maier tells me the company valuation was in the “nine figures.”
The round is more than triple the $11 million Series A the company raised in 2010. All investors from that round returned, according to FreeMonee; the company was self-funded for seed funding.
Describing the company as “Google for bricks and mortar,” Maier says they have a three-pronged attack to help retailers generate new profits, consumers receive relevant incentives and card issuers increase card usage.
FreeMonee gifts, such as a $5 credit at a clothing store, link directly to a consumer’s credit or debit card as a cash gift that can be spent at that store. Unlike a coupon, the credit has no strings attached (you can spend any amount you want, etc.).
FreeMonee says they have invested two years in developing an algorithm, which Maier compares to bank algorithms for loans, that matches the right gift, consumer, amount and time to make it profitable for the stores. The company claims that response rates are 10-50 times that of traditional promotions or coupons and merchants see 500-900 percent return on ad spend.
“Our mission is to change the economics of advertising,” Maier tells me. “And we’re doing it. We can prove beyond any question that we drove all those results. And I will challenge anyone else to do that.”
FreeMonee has only been in the market for nine months, but already has four of the eight largest U.S. banks as clients (FreeMonee executives would only disclose Capital One and U.S. Bank). The company also has “over 100 merchants,” but Maier declined to name them for privacy reasons.
The company says it will use the round to expand to more retailers and create more partnerships with U.S. banks and credit issuers. Maier says they expect to hire 25-30 new employees.
Update: In an earlier version of this post, I incorrectly identified Maier as Chief Marketing Officer Jim Taschetta.
FreeMonee is changing the economics of advertising by enabling stores and restaurants to attract customers on demand using FreeMonee Gifts. With its unique new consumer incentive, FreeMonee delivers gifts of money directly to cardholders of the largest financial institutions. Customized to precisely match consumer interest, gifts allow consumers to purchase anything they want at designated stores or restaurants—no strings attached. The gifts are made possible by FreeMonee’s proprietary Gift Underwriting Engine, which accurately determines the right gift to ensure...