Rewardli Lets SMBs Leverage Their Social Graph To Get Discounts On Purchases

Over the past few years, millions of consumers have bought into the deal of the day and group buying craze. But what about small to medium sized businesses? There are 26 million SMBs (small to medium sized businesses) in the US, who spend an average of $180,000 per year on non-payroll expenses, for a market size of $3.9 trillion in transactions. These businesses need discounts on web hosting, office equipment, paper and more. Rewardli, which is launching today at TechCrunch Disrupt, fills that gap by allowing small businesses to leverage their social graph to form buying groups and save money on purchases they make already in their day-to-day activities.

Basically, Rewardli features “always on” deals, where small business owners can visit the site’s marketplace buy what they need, when they need it, and receive cash back on all purchases. Over 70 vendors have signed up to offer cash back rewards, including Staples, FedEx Office, Expedia, GoDaddy, Skype, Travelocity and more.

The purchaser click on the deal, which is anywhere from 2 to 50 percent off, and will be led to the landing page of the vendor, but will include a checkout code when the business makes the purchase. For example, a businesses could receive a $10 cash back bonus when making travel plans via Priceline.

The social component comes in when the business owner signs into Rewardli. You can sign in with Facebook Connect and your LinkedIn account and as you and your friends buy from Rewardli, the deals get better. Users can also request a deal and then share the request with their social graph in order to get more engagement and increase the chance of the deal happening. Plus, Rewardli also offers a browser extension that automatically lets you know if you’re on a site that the startup offers a deal with.

Another popular use of Rewardli is forming private groups for accessing deals. For example, Rewardli (which graduated from 500 Startups’ first class), powers a private deal site for 500 Startups companies. On that private site, companies can access discounts on services offered by Amazon Web Services, Tapjoy and more.

The idea is to launch similar private sites for loyalty groups, conferences and alumni and member associations. Soon Rewardli will be powering private deals sites for the Performance Marketing Association, Startup North (Canadian tech blog), and two conferences (The Daily Deal Summit and LeadsCon).

Rewardli makes money by taking a cut of each transaction that happens on the platform. In early testing, the startup has been saving users an average of 10% on their purchases, which equates to the startup making 3% on the total volume. In the future, Rewardli plans to sell a white label solution as a SaaS offering.

The company has also closed a seed round of $500,000 from 500 Startups and others.

Judges: John Ham (Ustream), Hilary Mason (, Kevin Rose (Milk), George Zachary (Charles River Ventures)

HM: I love the chrome extension. Could this be available for every deal?

A: We could index that information. It could also be a way to onboard groups.

GZ: Can you address competition?

A: We’re not a daily deal site. Small businesses have different purchase behavior. We’re also demand driven.

KR: I’m confused by first transaction. When does the percentage off increase?

A: We basically take a snapshot of your buying power, and give you a discount based on that. We can play with the formula any way we want.

JH: Congrats on launching. I like it, the initial focus on SMS is smart.