500friends, Inc., a customer rewards program for e-commerce retailers, has raised $4.5 million in a round of Series A funding, the company announced today. To stay competitive in this growing market, 500friends plans to improve its white-label platform and expand its sales and marketing teams.
“Historically, loyalty programs were only within reach for retailers with the financial resources to bring in specialized agencies or the ability to allocate significant internal resources to build and maintain complex systems,” said 500friends CEO Justin Yoshimura in a statement. “We are helping to level the playing field and give retailers, regardless of size, the ability to deploy rich and responsive programs that extend their relationships beyond the purchase and make customers into advocates.”
Launched in 2011, the LoyaltyPlus ™ program rewards customers for spreading the word about the brands they like by writing reviews, referring friends, and sharing products on Facebook or Twitter, as well as making purchases. 500friends also provides companies with design, integration, reporting and analytics services to make the platform easier to implement and scale.
Current clients include Hotels.com, US AutoParts, Shoebuy.com, L’Oreal, Armani, and newer e-commerce sites like Scentiments.com and PetfoodDirect.com. According to 500friends, these clients have seen an increase in their enrollment rates of up to 40 percent.
To create the platform, Yoshimura recruited e-commerce experts from Buy.com, eBillme, RichRelevance, StrongMail, PopularMedia, Digitas, IAC/InterActive Corp, Accertify, and Webloyalty. They participated in the Y Combinator mentoring program in 2010 and by 2011, Yoshimura was named one of Forbes‘ top 30 entrepreneurs under 30 years old in the social media and mobile technology industries.
Many other social loyalty companies have sprung up in the last year. In October 2011, Pricetector raised $2 million from Michael Burry of Scion Capital; in November, PunchTab raised $4.4 million in a round led by Mohr Davidow Ventures. More recently, Badgeville partnered with Klout to add social influence to its behavior platform.
500friends is based in San Francisco, CA. This latest round of funding was led by Crosslink Capital, with participation from Intel Capital and several members of the company’s executive team. Crosslink Capital general partner Eric Chin will join 500friends’ board of directors.
Image by mayawizard101 via Shutterstock.