Dosh Adds $40 Million in New Funding For Cash-Back Advertising App
Austin—[Updated and corrected, 2:36 p.m.] Dosh has added $40 million in new funding to further develop its mobile app that offers users cash back on certain purchases.
The money is Dosh’s Series B round of financing, and includes $20 million in equity financing and $20 million in venture debt. Goodwater Capital and Western Technology Investment led the funding for Austin, TX-based Dosh, and investors BAM Capital and Anthem Venture Partners also joined in the round. It follows a $44 million Series A round last April that was also led by Goodwater. Notably, PayPal (NASDAQ: PYPL), the San Jose, CA-based payment processing giant, invested in both the Series A and B funding rounds. [Corrected to reflect that Goodwater led both funding rounds.]
Western Technology Investment offers startups venture debt, which is similar to other lending but uses factors such as a company’s ability to raise additional equity funding, rather than the cash flows of the business, to price the loan, according to Silicon Valley Bank. The lender also gets warrants to purchase future stock as a part of the deal.
Dosh has now raised almost $100 million, according to news releases and securities filings. That includes about $73.7 million of equity funding, $20 million of debt financing, and almost $5.2 million of funding related to options, warrants, or rights to acquire securities. A spokesperson declined to reveal the company’s valuation. Dosh already felt well-capitalized after raising $44 million only nine months ago, which is why it didn’t seek out a larger financing for its Series B, the company wrote in an e-mail. [Updated with company comment.]
Founded in 2016, Dosh is targeting a niche in the advertising market by offering its users a chance to get a percentage of their purchase refunded to them immediately, in turn giving them incentive to visit or revisit the business that offered the rebate. Users of the Dosh app link a debit or credit card to their account, which gets refunded when they buy something with that card at merchants that work with Dosh.
The rebate amount depends on the deal the merchant offers—it might be $100 for a $360 hotel room, or a couple of dollars for a $30 tank of gas. Dosh CEO Ryan Wuerch previously told Xconomy the company takes a percentage off the top of the overall deal, typically around 8 percent to 12 percent.
Dosh has refunded $50 million to customers in the past year, and has millions of users, the company said in a news release. The company has previously said it works with a wide variety of businesses, including Sam’s Club, Forever 21, Mattress Firm, and Austin-based Murphy Adams Restaurant Group, which operates Mama Fu’s. Dosh tells its customers that the app promotes their brand and can provide businesses a better understanding of their customers’ buying decisions.
In addition to making improvements to the app, Dosh said it plans to use some of the funding to make new hires.