Magicpin, an India-based company that combines elements of Foursquare with offline-to-online services, has closed a $7 million Series B round. The money comes from existing backers Lightspeed India Partners, Westbridge and undisclosed overseas investors, and it takes the startup past $10 million raised to date.
The two-year-old company was founded by former Lightspeed investor Anshoo Sharma (CEO) and ex-Nexus Venture Partners investor Brij Bhushan (COO) who met while working at Bain. The idea is to build a bridge to let consumers find places to go and things to do, while giving merchants a window into reaching potential customers through the internet.
Magicpin, which spent time with Google’s Launchpad program last year, serves up deals and discounts in and around the location of consumers in the style of Foursquare but with a focus on images and multimedia. Merchants, meanwhile, pay a subscription fee to get on the platform and then hand over 12-15 percent of all revenue that is driven by Magicpin.
“The largest market that exists is the retail market and in India it’s a trillion-dollar opportunity,” Sharma told TechCrunch in an interview. “The bulk of the purchases and consumption is offline, but the ubiquity of smartphones and tech means that there’s an opportunity to go and disrupt it.”
“We want to be the discovery and also transaction platform. There needs to be a dedicated and contextual network around local experiences, and on the other side sit merchants, which makes for an interesting two-sided platform,” he added.
Sharma said the service has picked up more than one million registered users and counts more than 50,000 merchants across the three cities it is currently in: Delhi, Bombay and Bangalore. He added that around 30 percent of users are active on a monthly basis, while, on average, active users are in the app for 30 minutes. Based on its business in May, Magicpin is on track to generate $40 million in annualized revenue for its merchants, he revealed. (That’s total spend in partner stores not Magicpin’s take-home, to be clear.)
That seems like a promising start, and Sharma is optimistic that revenue can more than double before the end of the year. One key component of that is expansion plans. The company plans to venture into new tier-one and tier-two cities and further develop the tech behind the product.
Already, the Magicpin founder said, the service provides insight on passing consumers to business — for example highlighting influencers or serving up potential sales options — and there are plans to provide more actionable intelligence. There are also ambitions to foray into more categories to further expand the scope of the service.