Back in 2012, London and New York based Shopa launched as a “social marketplace” where users were rewarded for promoting products they like. The company raised $1.4 million from Notion Capital and Octopus. Another in the arena is Shopcade, which has raised $4 million, or Nuji which raised $2 million. There’s something about these social shopping startups that European investors like – probably because of the early access to revenue models. Now another company plans to enter a similar space.
Favr.tt is a privately funded social shopping app for consumers and – in particular – social influencers that rewards them directly with cash when others click and buy on items they’ve linked to via affiliate links. What makes it stand out is its focus on mobile, via Android and iOS apps.
It launched quietly a couple of months ago but it’s now stepping on the gas.
Today London tech startup veteran Inmaculada Martinez has joined as CEO, alongside co-founder Matthew Woolf, CTO. Prior to Favr.tt, Martinez led a number of VC-backed startups to exit, such as Escape Velocity and Jutel Visual Radio Oulu, and she was the first employee at Moo.com. She’s also worked at Goldman Sachs, Cable & Wireless, and Nokia in its heyday.
Favr.tt’s graph database matches people with products, and rewards users’ social influence with cash-back commissions. Whereas a user would have to sign up to an affiliate scheme to share an affiliate link, with Favr.tt, a user just searches for a product and Favr.tt brings them back to the affiliate link, which is linked to their account. When they share it, any sale commission is credited directly to their bank account.
The company now plans to raise further funding with a view to launching in the US, the idea being to turn social media into one big affiliate marketing marketplace, effectively turning it from a B2B proposition into a consumer-facing phenomenon.
”If you are Skimlinks your clients are big publisher sites, but for us our client is Facebook and Twitter,” Martinez tells me. “This is where our users publish the opportunities, as we are 100% user generated content.”
In the parlance of the trade, it “monetises peer-2-many” recommendations and may well amplify social influence for brands. That’s assuming it doesn’t get sullied by the usual problems with spammy affiliate marketing.
Favr.tt competes in two ways with existing businesses.
First is the “cash-back payments to consumers” model, where catalogue-style discounted outlets such as Quidco give you money back on in-store spending — but only on a store-by-store basis. There are also cash-back credit cards.
Another model is companies that might pay you a few cents when you search for a flight on a search engine with affiliate deals.
But with Favr.tt users get cash sent to their PayPal accounts from any purchase, or any purchase made by others who click their social shopping links.
This taps into users who also recommend things on social media. There are differences between all these social shopping sites, however.
“We are taking payments on shopa so it’s much more of a marketplace than the guys at favr.tt which is affiliate based,” says Peter Janes, founder and CEO of Shopa.
Favr.tt looks and sounds like a good idea, but when your Twitter and Facebook feeds get a little over-cooked with products pushed by your ‘friends’ you know whether it’s actually worked or not.