Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Offers Partners & Diligence Process

  • Be the first to comment

  • Be the first to like this

Offers Partners & Diligence Process

  1. 1. © 2013 Karthik Ethirajan, all rights reserved Offers Partners & Diligence Process Karthik Ethirajan September 2013
  2. 2. © 2013 Karthik Ethirajan, all rights reserved Agenda 2 1. Due Diligence Process 2. Partners Snapshot 3. Key Learning 4. Partner Rap Sheet Venue / Events Offers  Archer CLO Offers  Citi  Edo  Cardlytics eGifting Offers  Blackhawk National Offers  Spotzot  Blue Kangaroo  RetailMeNot  DealNews Local Offers  Entertainment Books  ValPak National Deals  Gilt City Local Deals  SignPost Donations  Raz Mobile
  3. 3. © 2013 Karthik Ethirajan, all rights reserved 1 Partner Due Diligence: Process & Assessment Framework 3 • Market research • Partner phone interviews • 2 weeks Preliminary Assessment • Host a Partner Week at company • F2F meetings with New Ventures team • 2 weeks Business Diligence • F2F meetings with PD team at HQ • Technology deep dive • Platform integration assessment • 3 weeks Technical Diligence Invitee List for Partner Week 3 2 Qualified Partner Offers Business Model Partner Integration Plan Company Offers Sourcing • Revenue • How are offers sourced ? • # Employees • How big is sales force ? • Subs / Visitors • How many brands ? • Founded • Number of offers ? • Scale & stability • Coupon types (regular, exclusive, others) • Competitors • Offer categories • Closed loop tracking Business Model Technology / Platform • Revenue share or licensing model • Platform capabilities • Revenue from merchants: CPM, CPC or CPS • Software • Distribution model / partners • Web services (APIs, Widgets, others) • Coupon ASP ~ 10 partners ~ 5 partners ~ 3 partners Partner Rap Sheet Execute NDA Execute WIDA
  4. 4. © 2013 Karthik Ethirajan, all rights reserved 4 Partner Status Offer Type Interest Level Launch Target Business Term Tag Line On Hold Venues / Events High A campaign designer could be offered up as a VAS to merchants and can help win venue/events based offers On Hold CLO Low Brand name credit card company seeking exclusive MNO partnership in U.S. Hopes to replicate model from market launches in Europe and Asia Slow Response CLO Medium 2H14 Experienced sourcing CLO offers and standing up offers businesses with credit card companies. Looking for new partners to bring additional subs On Hold CLO Medium Another CLO specialist looking for a wider distribution and complimentary capabilities such as contextual targeting Contract eGift High 1H14 A eGift Card specialist with relationship to all major brands Contract Reg/Prem National High 2H13 Provider of curated public coupons as well as sponsored ones. Differentiates by its targeting of high intent shoppers & platform capabilities. Done Premium National High 2H13 A mCoupon provider to help national brands with in-store sales with a small proportion of premium offers No Deal Reg/Prem National Medium A mCoupon provider with an aspiration to be more of a platform player Done Premium Local High 2H13 ValPak is a local offers powerhouse with a lopsided business model for its affiliates. Savings.com is an offer source for national brands On Hold Premium Local High 1H14 EB is looking to replicate its successful “pay for coupons” model on the mobile side aided by its legacy brand name On Hold Local Deals High 1H14 A small local deals provider looking for distribution with favorable terms Slow Response National Deals High 1H13 A high value, exclusive brands, experiences niche deals provider offering sub-par terms to distribution partners
  5. 5. © 2013 Karthik Ethirajan, all rights reserved 5 Partner Status Offer Type Interest Level Launch Target Business Term Tag Line No Interest Donations Low Serves an interesting niche, donations, via a mobile platform and relationship with non-profit and political organizations Contract Premium National High 1H13 Provider of high quality offers for brand name products sourced mostly from public domain
  6. 6. © 2013 Karthik Ethirajan, all rights reserved Key Learning 6  Regular offers are non-monetizable  Premium offers are monetizable  There are few pure play content providers. Most partners want to sell both content and platform as a package. As such, agreeing to a technology collaboration will be key to consummating many of these deals.  Ideally, not more than one partner needed for each offer type
  7. 7. © 2013 Karthik Ethirajan, all rights reserved A campaign designer could be offered up as a VAS to merchants and can help win venue/events based offers 7 Company Impact • Willing and able to introduce merchants. Can serve as good lead to venue/events marketing. • With Archer partnership, company can offer campaign design as a VAS to merchants Contact • Michael Levinsohn , Executive Chairman Value Proposition • Design & delivery of SMS/MMS campaigns across the globe • Experience working directly with brands & MNOs worldwide Company & Products • Works with many international MNOs • Competitors: Hip Cricket, Velti (good international reach), Vibes • Reporting & analytics Business Model • Revenue from designing MMS/SMS campaigns and technology platform licensing • Text messages via SaaS model • MMS messages via managed services Technology • User agent profile database enriched with GSMA device profile database • Platform supports couponing, and POS integration • Improved throughput for A2P MMS messaging: xx MPS • MM7 and SS7 protocols • Eliminate transcoding problems • Video file format: 3GP. MP4 .MOV • Delivery rates of 70% + depending on handset database Interest Level Key Stats Founded 2005 156 employees Seattle HQ $25-35M revenue Revenue split: xx% carrier campaigns, xx% merchant campaigns, xx% platform 1,700 campaigns/mo. in U.S. HIGH Offer Type Venue/ Events
  8. 8. © 2013 Karthik Ethirajan, all rights reserved Brand name credit card company seeking exclusive MNO partnership in U.S. Hopes to replicate model from market launches in Europe and Asia 8 Company Impact • Wants company to provide access to subs, preload, care & co-marketing • Open to co-branded or company branded solution. Citi branding needs to be subtle in order not to unintentionally drive away other card holders • Looking for some sort of exclusivity (we can’t work with other banks or wallet solutions excluding Google Wallet) and in return Citi won’t partner with other MNOs • Agreed that non-CLO offers can drive both impressions & provide incremental revenue • We don’t need their wallet. We only needs their subs without driving away non-Citi subs. Contact • Richard Char, MD, Global Enterprise Payments • Rich Naddy Value Proposition • Closed loop CLO (Card Linked Offers) that requires no POS integration • Money2 wallet • Launch ready technology platform • Consumer shopping data is better than carrier phone data • International experience Company & Products • Just launched CLO offers in Hong Kong with the operator 3 • Little US presence using Edo platform • Mobile and online teams are organizationally apart • Not a big ISIS fan (may be because it is too inclusive) even though Citi is a ISIS member • Citi wallet can accept other cards to be added to it • Source offers from Cartera, mPhoria, Rearden (Citi invested $75M), Living Social • Product roadmap include gift cards and loyalty programs Business Model • Commission from merchants based on redemption (CPS) Technology • Enablers include NFC, location • Targeting based on location, context, demographics, shopping history Interest Level Key Stats LOW Offer Type CLO
  9. 9. © 2013 Karthik Ethirajan, all rights reserved Experienced sourcing CLO offers and standing up offers businesses with credit card companies. Looking for new partners to bring additional subs. 9 Company Impact • Open to doing a xx/yy rev share deal • Edo is looking for access to company’s subs & their credit card transaction data • Company won’t be able to monetize Edo’s existing subs base (from Edo’s partner cards) Contact • Steve Kietz, GM Strategic Partnerships Value Proposition • Closed loop CLO (Card Linked Offers) that requires no POS integration • Offers program does not require consumers to preselect offers. “Accidental redemptions” are ok. • Huge sales force to source offers directly from merchants Company & Products • Customers include Capital One, Citibank (U.S.), Discover, PageOnce app • Competitors: Cardlytics (hosts BankAmeriDeals), Cartera (powers Wells Fargo) • Targeting based on user credit card transaction data • Check (was PageOnce) 8M credit card transactions Business Model • Merchant commission (based on redemption CPS) to Edo is xx% for national brands, xx% for local or low priced items Technology • Passbook integration Interest Level Key Stats Founded 2007 106 employees (36 sales) Nashville HQ Revenue $10-20M $15M Series C Sep’12 35M partner card subs by 2013 2.3B offers forecasted in 2013 50/50 mobile/PC offers 60% offers national brands, 25% local and 15% online only 15% average discount 2-4 offers/week/user 2-4% redemption rate for national brands, 1-1.5% local 100+ national, 400+ local merchants MEDIUM Offer Type CLO
  10. 10. © 2013 Karthik Ethirajan, all rights reserved Another CLO specialist looking for a wider distribution and complimentary capabilities such as contextual targeting 10 Company Impact • Company does not have to collect credit card number, but need mobile number or a Connexus key • Willing to bring additional parties (such as a bank) in order to do contextual + behavioral targeting • Contextual targeting capability expected from company Contact • Jared Luskin, Partnerships • Julio Farach, Corporate Development Value Proposition • Offers program requires consumers to preselect offers • Focused more on local merchants Company & Products • Prefer company to handle contextual targeting and they will handle targeting based on shopping behavior • Offers are only sent to targeted customers; not broadcasted to all • They would like to be able to provide their own reporting back to merchants • Runs CLO programs for Bank of America, Regions, PNC, etc. • Gets a lot of Starbucks campaigns Business Model • Merchant commission (based on redemption CPS) will be split across Cardlytics, company and a bank Technology • Shopping data will most likely come from a 3rd party such as a credit card issuer • Targeting: Need some level of PII data or Equifax’s Connexus key to be transmitted from company to Cardlytics real-time so that the user’s credit card and hence their shopping transactions can retrieved Interest Level Key Stats Founded 2007 250 employees (Sales: 16 national, 65 local) Atlanta HQ Revenue $10-20M $100M total raised thru Series D 15M monthly mobile users 70M credit card accounts 380 financial institutions 1500 merchants (a few hundred national, rest all local) 18 active offers xx% of users activate offers xx% of users redeem offers MEDIUM Offer Type CLO
  11. 11. © 2013 Karthik Ethirajan, all rights reserved A eGift Card specialist with relationship to all major brands 11 Company Impact • Offers a rev share of xx/yy between BH/company and in case where payment transaction costs are involved, it would be taken out of BH share Contact • Patrick Ramsey • Jaime Rodriguez, product director Value Proposition • Carry eGift cards from many brand names on GiftCardMall.com • Has many flavors of eGift card related offers Company & Products • Subsidiary of Safeway Inc. • Carries both prepaid and coupon-type offers • Offer types: Bonus value gift cards, CLO, promotional value gift cards, unlimited use coupon and redemption value gift cards • Support transaction types such as gift card activation, reload & redemption Business Model • Commission from merchants (~ xx% typically) on sale of their gift cards and offers Technology • eGifting platform • REST based services • Resource based services that use JSON over https Interest Level Key Stats Oakland, CA HQ 100k stores selling BH cards 18 markets overseas HIGH Offer Type eGifting
  12. 12. © 2013 Karthik Ethirajan, all rights reserved Provider of curated public coupons as well as sponsored ones. Differentiates by its targeting of high intent shoppers & platform capabilities . 12 Company Impact • CPC based monetization of sponsored offers (varies based on offer, determined by Spotzot) • Willing to send (rank ordered) coupon feeds. Focused on distribution. • Require sharing of user ID & location so they can do the targeting instead of our platform Contact • Jim Schreitmueller, Co- founder, VP Sales Value Proposition • Sources sponsored offers directly from merchants and curates offers from 1500 public sources • Ability to target high intent shoppers. Platform/APIs to enable location, voice search, etc. and generate an offer list Company & Products • Competitors: ShopSavvy, Shopkick, CardStar, Geodelic • Has an affiliate program and works with ad networks (Amobee, Jumptap) for distribution • Analytics for merchants. Defined a shopping index = Shopping Intent / Shopping Interest • Shopping Scorecard portal for merchants shows foot traffic, shopping index, etc. • Spotzot does not self-publish their own offers Business Model • Sponsored Offers (coupons & sale promos): Commission based coupons (~ xx%) sourced directly from merchants • They keep xx% of revenue from merchants and distribute the rest to publishers (affiliates) based on performance at $xx CPC Technology • Publishers provide user location & unique ID and receive an offer list from Spotzot • Offer list is dynamically generated using targeting data • Spotzot could insert an i-frame within a publisher app to render merchant offer. Publishers control user experience. • RESTful APIs for integrating content and enabling location, barcode, voice search, social, digital wallet, check-in, other mall-centric shopping features Interest Level Key Stats Founded 2009 40 employees Bay Area HQ $2.2M Series A Nov’11 $1-$10M Revenue (estimated) 300K-2M impressions/campaign 20-40% CTR on 2-5 minute session time 15k brands, 500k stores 15 product categories 1500 offer sources $xx CPC for Publishes ~1000 coupons/day, 10 sponsored (merchant paid) ~100 shopping apps (Pubs.) 3x ROI guarantee for merchants HIGH Offer Type Reg/Prem National
  13. 13. © 2013 Karthik Ethirajan, all rights reserved A mCoupon provider, with a small proportion of premium offers, that helps national brands with in- store sales 13 Company Impact • Sending us only premium offers (Goal: 5 active offers at any time) • 4 rev share models: 1) xx/yy or better CPS (% sales based on redemption), 2) % flat fee based on redemption, 3) % sales based on traffic, 4) % flat fee based on traffic • Enthusiastically engaged. Giving us early access to API and wants feedback • Sees synergy with our Telefonica relationship as they have presence in Europe • RMN will not provide direct customer care for coupon issues Contact • Ian Mooney, Business Development Manager • Jody Goehring Value Proposition • Provide mobile coupons usable in-store with a promo code Company & Products • A Whaleshark Media property • Operate 7 websites in NA and Europe Business Model • Commission from merchants Technology • Merchant metadata includes merchant name, logos, locations, POS capabilities • Other merchant data include closed loop status, monetization status and payment structure & rate • Offer data include title, description, start date, expiration date, restrictions, T&C, valid locations, offer image, category, offer type, redemption methods, distribution limits and offer URL • Publisher Analytics: page views, visits, engagement actions, POS feedback, benchmarking Interest Level Key Stats Austin, TX HQ Revenue $120M in 2012 $1.7B in merchant sales in 2011 100k merchants 5M downloads xx% mobile traffic in 2012, xx% forecasted by 2015 Inventory of xxM coupons, xx% crowd sourced HIGH Offer Type Premium National
  14. 14. © 2013 Karthik Ethirajan, all rights reserved A mCoupon provider with an aspiration to be more of a platform player 14 Company Impact • Currently feeding offers to Eureka app and showcased on lumen bar • $xxM for content + platform (Rewards/Loyalty, Product Lists) or $xxM for content only. It is a 2- year contract. Contact Value Proposition • A strong content player for local and national offers • Technology investment for an offers platform that touts many features Company & Products • A ChoozOn property • Primitive mobile app • Redirects consumers to merchant site for redemption • Mostly scraped coupons like others. Good assortment of brands though. Business Model • Commission from merchants for premium offers • Platform license fee Technology • Personalization Platform • Deal Search & Deal Recommendation Engine • Marketing Inbox • Geo-Fence Based Notification of Offers • Browser-Based Notification of Offers • Social Sharing of Deals Interest Level Key Stats Founded 2010 Seattle HQ Top 2000 brands MEDIUM Offer Type Reg/Prem National
  15. 15. © 2013 Karthik Ethirajan, all rights reserved ValPak is a local offers powerhouse with a lopsided business model for its affiliates. Savings.com is an offer source for national brands 15 Company Impact • Willing to engage on a pilot to test CPC rev share model (not interested in CPM) • ValPak offers feeds are from local merchants (feeds from other players are mostly national brands) Contact • Fred Steube, Dir. of Digital Innovation • Gigi Swanson, Technical Lead Value Proposition • ValPak provides local merchant offers and Savings.com provides national brand offers • ValPak is a 40+ year old household brand Company & Products • Both brands are owned by Cox • ValPak distributes local coupons via envelopes, online and mobile app • ValPak offers are integrated into Microsoft Wallet • Business Profile Page (BPP) for local merchants. It helps Valpak do better SEO. • Launched a new merchant app to handle PoS side • Plan to launch CLO • Savings.com sources offers directly and via UGC • Savings.com use ad network (LinkShare) for distribution • DealPro: Savings.com network of deal experts and bloggers • ValPak partners include Roximity (connected car), YaSabe (spanish search for local business, YellowBot (business data source), GeoQpons (LBS), Coupon Cabin Business Model • Franchises get local offers and decide pricing to merchants. ValPak collects a fixed-rate fee from its franchises. • Revenue-neutral model: Affiliates don’t get compensated distributing ValPak offers Technology • Passbook integration, augmented reality, geo, connected car Interest Level Key Stats 40M/mo. print distribution in NA 5M unique visitors/mo. 170 franchises 100k offers from national brands 70k offers from 30k local merchants 2.5 offers/local merchant 3.6M coupons printed 640M offers viewed in 2011 HIGH Offer Type Premium Local
  16. 16. © 2013 Karthik Ethirajan, all rights reserved EB is looking to replicate its successful “pay for coupons” model on the mobile side aided by its legacy brand name 16 Company Impact • Proposed that the first $xx revenue goes to EB (guaranteed in 18 months), the second $xx revenue goes to company, and xx/xx revenue split thereafter. It is a 2-year contract. • Monthly subscription will be set at $xx or $xx based on the results of a A/B market test. Subs can redeem up to 10 premium offers per month. • Required creating a special folder with subscription based access inside the app • EB provide customer care for any of its offer related questions. Company takes care of the rest including subscription purchase and management. Contact • Dainon Haggard, VP Marketing Value Proposition • Brand legacy of 30+ year old • Offered both local and national coupons including some premium offers Company & Products • Emerging from Chapter 11 bankruptcy with founding family taking control of the company again • Offer types: Frequent Values (20% discount) & Premium offers (buy one, get one 50% off) • Offer categories: Dining, Events & Attractions, Shopping, Travel Business Model • A monthly subscription based model to access EB coupon book, typically $35/year/market • Publishers on their own and sells wholesale (typical contract is $xx worth of coupons for 12 months) to companies which in turn offer coupon books & online access as a benefit to their employees, clients, etc. • Makes money from participating in many fundraising events similar to Girl Scouts Cookies Technology • EB to send company daily XML feed of offers Interest Level Key Stats Troy, MI HQ ~500 employees 160 markets (~1 sales person per market) 40k merchants 75k offers 93k store locations Offer Type Premium Local HIGH
  17. 17. © 2013 Karthik Ethirajan, all rights reserved A small local deals provider looking for distribution with favorable terms 17 Company Impact • Small company • Favorable (xx% rev share) business terms for distribution partners • Will provide a landing page until company has checkout capability Contact • Jacco de Bruijn, VP Business Development Value Proposition • Provide highly discounted local deals • Distribute via their own website as well as multiple partners • Help small merchants setup campaigns & provide reporting Company & Products • Tag line: Marketing automation for local business • Distribution partners: Google, Amazon, Microsoft, MasterCard, CBS, eBay, AoL, Gilt, Digital First media • Each campaign is matched to only one or two partners Business Model • Signpost charges merchants a flat monthly fee of $xx for their services • Distribution partner gets to keep all transaction commission (typically xx% of sales) Technology • Distribution Engine selects a partner for running a campaign based on merchant targeting requirements, caps on deals, and other distribution partner requirements • Campaign meta data supported is limited to merchant targeting preferences & merchant location Interest Level Key Stats 70 employees (50 sales) Revenue <$10M NYC HQ 40 US markets 15k SMB merchants >50% discounted deals HIGH Offer Type Local Deals
  18. 18. © 2013 Karthik Ethirajan, all rights reserved A high value, exclusive brands, experiences niche deals provider offering sub-par terms to distribution partners 18 Company Impact • Company gets xx% of sale (~ xx/yy split between Gilt/company) for new users to Gilt, and xx% (~ xx/yy) for existing Gilt users • Purchase experience not contained within company Contact • Laura Buhler, Business Strategy Manager Value Proposition • Highly brand conscious player • High value deals, small exclusive inventory Company & Products • Gilt, parent company, has many product themes: Gilt female, man, kids, home, taste (restaurants), city (experiences) • Use Commission Junction to track conversion with affiliate network participants • Seen greater success with iPhone shoppers • Gilt’s partner diligence process entails: 1) past sales, 2) brand alignment, 3) potential to scale • Big on social media integration Business Model • Typical sales commission from merchants is xx% of sales Technology • Providers XML feeds to affiliates • Redirects to Gilt property for checkout (higher risk of cart abandonment for mobile users) • Not too big an emphasis on targeting, much like other deals providers Interest Level Key Stats 100 employees (Gilt 1000 emp.) ~ 100 deals at any time 2.5M registered users 4M app downloads xxM online impressions xx% of sales from mobile HIGH Offer Type National Deals
  19. 19. © 2013 Karthik Ethirajan, all rights reserved Serves an interesting niche, donations, via a mobile platform and relationship with non-profit and political organizations 19 Company Impact • Offers Raz/Company xx/yy revenue split Contact • Dale Knoop, Founder Value Proposition • Provides information about donors to Non-Profit Organization (NPO) and political campaigns Company & Products • Social sharing is enabled • Considers text-to-give as the main competitor pointing to its high cost. Also, carrier billed SMS solution limits donations to $5 and $10 • Maintains user credentials on file to facilitate repeat donations Business Model • RĀZ Mobile charges xx/month per client + x% of donations processed (~ averages to $xx processing fee for every $1 in donation) Technology • Follow LAMP process • Provides a mobile optimized browser for NPOs to use Interest Level Key Stats 3 employees Kansas City, KS HQ Launched Aug 2011 ~24 NPOs Raised $900k angel round LOW Offer Type Donations
  20. 20. © 2013 Karthik Ethirajan, all rights reserved Provider of high quality offers for brand name products sourced mostly from public domain 20 Company Impact • Offers xx/yy revenue split on both CPS and CPC • Does not require any subscribed data to be passed over Contact • Jeremy Globerson, VP Business Development Value Proposition • High quality offers with commentary from public domain • Guranantees lowest price and high quality (usability) to consumers • 90% of offers are monetizable, mostly national brands Company & Products • Company founders prefer to keep the company private • 30 member editorial team curates offers • Focuses on product-specific offers rather than store-specific offers • The newly found offers are typically showcased in the homepage for 24 hours Business Model • Typical sees CPC (about xx% of offers) and CPS for the rest Technology • Mature API, experience syndicating offers with other publishers • Robust process for tracking revenue & accounting Interest Level Key Stats 90 employees Huntsville, AL HQ Founded 1997, still private ~300 new offers/day Raised $900k angel round HIGH Offer Type Premium National

×