Offers Partners & Diligence Process

© 2013 Karthik Ethirajan, all rights reserved
Offers Partners & Diligence Process
Karthik Ethirajan
September 2013

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

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
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
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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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