Fondue CashBack, the Shopify app, has closed on a $10 million in seed funding led by Quiet Capital and Hanaco Ventures, it announced on Monday, September 19. Tel Aviv and New York City-based company replaces discount codes with brand-embedded cash back.
Fondue CashBack plans to use the funds for expanding its offline CashBack channel, boosting product developments and increase its go-to-market strategy. According to the company, e-commerce sales will exceed $5.5 trillion this year and double-digit growth will sustain year over year.
Discounts are critical for driving conversions throughout eCommerce, and are reported to account for 17.9% of total sale revenue.
Oren Charnoff, CEO and co-founder, Fondue CashBack
Other investors include Infinity Ventures, Sugar Capital, Ground Up Ventures, R-Squared Ventures, Starting Line, Gaingels, Verissimo Ventures, JAM Fund and Samsung Next. Founders and executives also joined the seed-funding round as well from fintechs and consumer brands including Casper, Thumbtack, Perry Ellis, TheRealReal, Candid, CatchCo, Plaid, Carraway, Melio, Loox, Ramp and Venmo.
“More Profitable Than Legacy Discounting”
“Brands are addicted to legacy discounting strategies like coupon codes, thinking it’s just the cost of doing business,” said Oren Charnoff, CEO and co-founder, in a press release.
“Fondue CashBack is more profitable than legacy discounting so brands enjoy a positive feedback loop of higher conversion, more profit, more LTV [lifetime value] — money they can reinvest back into sustainable growth,” he said.
“Discounts are critical for driving conversions throughout eCommerce, and are reported to account for 17.9% of total sale revenue,” the CEO added.
How it Works?
“Navigate to any Shopify merchant and you’ll be pummeled with coupon code offers. These are great for the simple reason that they work, but they come at an increasingly prohibitive hit to margin,” said Dr. William Herlands, co-founder and CTO.
“One of our merchant partners put it best: ’I give 15% codes to new shoppers, but that cuts my profit by over 40%. It’s impossible to grow profitably like that,’” he said.
Commenting on the importance of CashBack, Abraham Lucey, COO and Co-Founder of Fondue CashBack, said, “It’s never been harder or more important than today to grow profitability in ecommerce. CashBack means brands can meet this mandate by giving agency to shoppers and being rewarded with larger AOV, more profit on first purchase, greater engagement, and higher LTV. “
“It’s not a discount at the register — it’s basically a post-purchase price discount, and it comes in the form of cash back,” said Inmar Intelligence General Manager Sylvain Mansier. “Those are being more and more commonly utilized in combination with digital coupons,” he added. As the availability of coupon declines, more brands are heading to embrace digital promotions, said Mansier.
About Fondue CashBack
Fondue CashBack is an app that helps merchants drive profitable growth by replacing coupon codes with CashBack. This helps in increased conversion and profit. According to the company, CashBack is more stronger converting purchase incentive that discount codes.
Fondue CashBack is compatible with tools that are already being used by the merchants. It works anywhere a brand is using a discount: site popups, winbacks, ads, influencers and more. Brands like Duradry, Steve Madden, Birthdate Candles are using Fondue. It offers 30-day free trial and charges $19.99 per month after it.
