Grand Rapids Mobile Wallet App, Benefit, Snags $900K
Grand Rapids, MI-based mobile wallet app Benefit said Monday that it has closed on $900,000 in seed funding. Investors were officially undisclosed, but CEO Derik Lolli said they include Start Garden and various angel investors, most based in West Michigan.
When Xconomy first covered Benefit in February 2014, the company was hoping to make school fundraising easier with an app that allowed users to donate part of their gift card purchase to the school or charitable cause of their choice. Nowadays, Benefit is a pre-paid mobile wallet app where everyday transactions result in a donation or contribution.
Users can still buy e-gift cards from the app, and Benefit then passes the discounted rate to whatever cause the user chooses, including schools, non-profits, or a personal life expense, like a mortgage or healthcare premium. Benefit also has partnerships with big retailers like Amazon, Target, and Whole Foods to offer up to 20 percent of the purchase price back when customers use the Benefit app at the point of sale.
“If you use our app, three to 20 percent of the transaction goes to what matters—schools; healthcare costs; a mortgage,” Lolli said.
The company also offers a white-label service to help companies create branded mobile wallet apps powered by Benefit. For instance, Priority Health uses Benefit’s technology to offer its members savings on premiums and the ability to pay for other services associated with a healthy lifestyle, like a flexible spending account or a gym membership.
Lolli said he’s expecting “a couple million” in revenues this year. When describing the potential his company has to do something significant, he cites Ebates, a cash-rebate shopping site which was sold to Rakuten last year for $1 billion. “With Ebates, users have to shop from a desktop computer,” Lolli said. “With our app, it allows you to shop in stores, and money comes back to you. We think that’s a good value proposition.”
Another relevant deal is PayPal’s acquisition of Paydiant last month. Paydiant makes mobile-payment and rewards software for banks and retailers. Meanwhile, big companies like Apple, Google, and Samsung have been pursuing various strategies in payments.
Benefit, which has six full-time staffers, plans to use the new money to support the white-label part of the business, and ramp up sales and marketing efforts. Lolli said so far, thousands of users have downloaded the Benefit app.