Gift card affiliate startup JungleCents announces today the closing of a seed round of financing in which billionaire Mark Cuban is the only investor. Along with Cuban as an advisor, the JungleCents board includes Hollywood producer Peter Safran, Guy Kawasaki and Bill Reichert from Garage Ventures.
While JungleCents would not disclose the amount of funding received, this looks like it was at most a $1.5 million seed round.
The concept behind JungleCents is a lead generation model similar to how airlines and travel companies such as Orbitz pay affiliate sites like Kayak between $10 to $30 for bringing in new customers. JungleCents, taking a cue from sites like Commission Junction, aims to reroute customer acquisition costs into their giftcard model, accepting giftcards from companies in lieu of cash and then running those giftcards as daily deals off the JungleCents site in order to hook in users.
Negotiating deals with companies like Whole Foods, Beyond the Rack and Amazon, JungleCents offers their $20-$50 discount gift cards in limited quantity for a limited time. Founder Sameer Mehta describes the site, “sort of like a Gilt meets Groupon, but with higher margins and a stronger value proposition.”
Unlike Groupon, JungleCents offers giftcards instead of coupons and its deals are national instead of local, “It’s clear to us that JungleCents has a different niche- focusing on online merchants, big national brands, and offering consumers cash value that they can apply to their selection, vs. a discount on a specific item, ” says Mehta.
Mehta plans on using the extra funding to hire more people and extend out JungleCents marketing efforts but insists that having Mark Cuban as an investor is less about the money and more about the knowledge he brings to the table, “We get more value added from Mark’s investor contacts, and his knowledge is what it will take to push this deal to the next level.”
Image: JD Lasica